The partial sale of TikTok to Oracle Corp. (NYSE: ORCL), if it goes through, may be the final transaction of real substance in the career Oracle founder Larry Ellison. The deal would make his company a giant in cloud computing. It could change the way that the world’s largest retailer drives customers. And Oracle will never make a deal this size again. At the very least, it could move a perennial second-tier major tech company toward the first tier.
At 76 years old, Ellison, one of the richest people in America, already has turned operating control of his company over to others. His net worth has been set as high as $80 billion. Recently, Oracle has run out of steam. Revenue has been fairly flat at just shy of $40 billion. Oracle’s market cap is “only” $185 billion. Rival Microsoft Corp. (NASDAQ: MSFT) has seen revenue skyrocket over the past three years to $143 billion, and its market value has ballooned to $1.55 trillion. Microsoft’s stock is up 70% in the past year, while Oracle’s is only 14% higher. The Nasdaq is up by 35% over the same period.
The TikTok deal remains in flux. In one set of circumstances, Oracle would own a minority share, host the massive amounts of data used to operate the social medium and track the service to make sure important user data is not transferred to TikTok parent ByteDance in China. Alternatively, if it becomes among the U.S. owners with voting control of TikTok, it will be a major force in advertising and consumer marketing, with potential partner Walmart (a challenger of Amazon’s consumer business), a partner to some of the largest private equity firms and a force in consumer tech after decades as a vendor of enterprise software and services.
TikTok also gives Oracle a footprint in social media, among the few major drivers of the American tech industry over the past decade. Facebook leads the industry. However, Microsoft’s LinkedIn gives it an important seat at the social media table. Apple Inc. (NASDAQ: AAPL) is not a social media company, but it has one of the largest webs of consumers in the world, who share in a massive services business that ranges from cloud computing to operating systems to consumer software sales.
There are not many tech “whales” the size of TikTok. That is true more based on its number of customers and troves of data than on revenue alone. Oracle might wait years for a similar deal that could fundamentally transform it. Just as likely, no such deal will ever happen along again. Ellison won’t have a TikTok moment for the rest of his career.