Last week, the White House extended Tiktok’s deal with 71 days, again extending the deadline for dispatch services, divesting services to the United States or another country deemed US friendly
“We don’t want Tiktok to go dark,” Donald Trump told Truth Social later last week. “We look forward to working with Tiktok and China to complete the deal. Thank you for your attention on this matter!”
For its 170 million US users and many companies, keeping Tiktok alive in the United States is a big deal. This could be a particularly important thing for Amazon.com, becoming a potential suitor to Tiktok assets last week.
“It checked two rather large boxes,” TD Cowen analyst John Blackledge said of Amazon’s possible purchase of Tiktok. “This will give them a significant social platform. It will also accelerate their position in social trade.”
According to a 2024 survey by the Pew Research Center, one in three U.S. adults use Tiktok, while the coveted population under 30 is as high as 59%. More than half of the teenagers use daily for 13 to 17 years old. Even the elderly of two people use tiktok.
Tiktok pioneered a full-screen endless reel of short vertical videos copied by Meta Platforms’ Instagram and Alphabet’s YouTube as they try to resist the threat to social media dominance.
Tiktok Shop is a recent phenomenon where brands and independent video manufacturers can sell goods directly on the platform. Tiktok Shop, along with popular shopping apps Shein and Temu, poses a threat to Amazon.com’s e-commerce dominance.
Like Instagram and YouTube, Amazon also has a Tiktok Clone called Inspire Inspire, built in 2022, and soon after Bytedance began beta testing of Tiktok Shop in the UK, although it tried to inspire the popular Tiktok E-Commerce account to switch to the popular Tiktok E-Commerce account, the service was not able to gain traction. Amazon shut down Inspire in February.
Tiktok Shop will provide Amazon with immediate and significant social business improvements while increasing its already massive advertising revenue.
Amazon is still very long to buy Tiktok. A familiarity with the matter told Barron last week that the parties attending the talks did not seem to take Amazon’s bid seriously. There may also be antitrust issues.
Amazon’s reward could be the potential to transfer most of Tiktok’s global cloud services to its own cloud AWS. The current American cloud provider for Tiktok is Oracle.
Any Tiktok deal may still take a while to get together. People familiar with the matter told Barron last week that the president’s latest tariff announcement derailed, selling most social media apps to a deal for a group of buyers in the United States. The person said that representatives who called White House last Thursday said China would no longer approve the deal until negotiations on trade and tariffs could be conducted.
Trump said on the Society of Truth on Monday that if China does not withdraw its 34% tariff increase, it will threaten the United States by Tuesday, and he will impose additional tariffs on the country, “All negotiations with China on their request for meetings with us will be terminated.” This puts Tiktok’s future on the air of the United States.
Oracle may still have an internal track in the transaction. People familiar with the matter told Barron that the Trump administration is completing plans for potential investors, including Oracle.
During Trump’s first term as president, Oracle executive chairman Larry Ellison’s close relationship with the president acquired Tiktok’s U.S. cloud business. With Tiktok’s stake, Oracle may want to add much of the rest of the world to it. But this will also add to social media, advertising and e-commerce, Oracle has no experience. It has never been a truly consumer-oriented business.
Write to Adam Levine adam.levine@barrons.com With Angela Palumbo angela.palumbo@dowjones.com
