Head-Scratcher: Making Sense Of Why Oracle Would Be Interested In TikTok

Tech company Oracle Corporation ORCL is reportedly interested in joining a bidding war to acquire TikTok and close observers are scrambling to figure out why.

A Surprise Report: Financial Times reported Monday evening Oracle is competing with Microsoft Corporation MSFT to buy the social media app.

To any tech observer, the report might be confusing as Oracle is a pure enterprise-facing company, FT's Arash Massoudi said on CNBC's "Worldwide Exchange." By contrast, Microsoft has more direct exposure to consumers through LinkedIn.

However, as a cloud enterprise software management company, Oracle looks at TikTok as a "data play" or information about consumers.

Either way, a lot of people are "scratching their heads."

Related Link: ByteDance Gets 90 Days To Divest Its US Stake In TikTok

The Oracle Advantage: Oracle is teaming up with some of the American investors behind TikTok's parent company, ByteDance as part of "one of the craziest and most complex situations" in corporate America, Massoudi said. There are just too many parties that need to achieve a favorable outcome in any acquisition, including the Trump administration and the Chinese government.

Regardless of why Oracle wants to acquire TikTok, Massoudi said it has a big advantage against rival bidders. Oracle CEO Larry Ellison is a very talented entrepreneur and a known supporter of the Republican president.

A Simple Explanation: Oracle could merely be looking at TikTok as an investment in a successful product, Recode co-founder Walt Mossberg said on CNBC's "Squawk Alley." Instead, Ellison could be interested in TikTok as part of a political play.

"President Trump needs some American company to take these assets of TikTok in order to justify his policy position versus China," Mossberg said.