Why is US IT firm Oracle about to buy Tick Tok?

It’s tempting to dismiss the Chinese social platform as the most recent set of “hair plugs” for middle aged US companies-  a youth-inducing add-on for mid  life crisis companies designed to juice their stock price.

When Microsoft, Walmart and Oracle announced interest in Tik Tok, each firm received a sugar hit from the stock market.

Walmart got a $17B boost, Oracle added $4B in stock value ,while Microsoft added a whopping $88N – that is equal to the combined market capitalization of Snapchat, Peloton, Pinterest and the New York Times.

But why were they so interested?  Right now, Tik Tok show’s 500 million users see a fraction of the ads that other social media companies post.

Percentage of posts that are ads:

Facebook: 21.2%

Instagram: 20.6%

LinkedIn: 19.6%

Twitter: 14.2%

Tik Tok: 2.4%

A new owner could increase the frequency of ads  – which would boost revenues ten fold. That buys a lot of hair plugs.

Posted in: Infographic of the day