A potential ban on TikTok in the United States will leave millions of users without one of the country’s most popular social networks. but The closure of the platform owned by the Chinese company ByteDance will not only affect its subscribersIt will also have a negative impact on content creators and small businesses that use program To promote their business and even their suppliers.
between them, inspirationThe American company has just warned in its annual report. The negative impact TikTok shutdown could have on your income and profits In the North American country. Specifically, analysts estimate that it may stop earning up to $800 million (746 million euros at the current exchange rate) annually.
Oracle includes the ban on the platform in the US market within Legal and regulatory risks for your business. Specifically, it notes risks arising from its international operations, sales and global customer base, which could “adversely impact” its operating results.
The technology company confirmed this in the report corresponding to the fiscal year 2023-2024 He closely follows relations between the United States and other countries such as Russia, Belarus, and ChinaHowever, he admits that it is difficult to predict the impact that his home country’s international relations might have on his business and financial results.
However, he notes that the imposition of new economic sanctions, export controls, or other regulatory restrictions (and their countermeasures) by the United States or other countries could exacerbate the problem. Prevent Oracle from providing services to certain customers or restrict the Company or its customers from operating in certain jurisdictions.
Joe Biden
Here, for example, is the signing of the agreement by US President Joe Biden last April. Bill Would Make It Illegal to Provide Internet Hosting Services to TikTok If ByteDance, the company that owns the social network, does not take certain actions within a certain period of time.
“If we are unable to provide these services to TikTok, and if we are unable to redeploy this capability in a timely manner, Our revenues and profits will be adversely affected“The American technology company warns.
Ban tiktok.
US President Joe Biden signed the bill on April 24 that could ban TikTok from operating in the US if it is owned by a Chinese company. ByteDance won’t sell short-form video app in nine months.
This law, which was approved in both the US Congress and the Senate, represents a new attempt by the US executive branch to prevent one of the country’s most popular social media networks from remaining under the control of a Chinese company, given the risks involved. Exposed to national security.
The US has already threatened to ban TikTok in the past. However, in 2020, ByteDance reached an agreement to sell 12.5% of TikTok Global to Oracle and another 7.5% to Walmart. However, the project was never closed after Joe Biden replaced Donald Trump in the White House.
Additionally, he adds that compliance with new laws such as the one that imposes a potential ban on TikTok in the United States It can also increase your expenseswhere you may need to hire additional specialized or other resources to assist the company in its efforts to adapt to legislative changes.
inspiration It became TikTok’s secure cloud technology provider in September 2020According to analysts, the social network is currently one of the major customers of the American company’s data processing and storage infrastructure business, if not the largest.
Economic impact
Oracle does not provide specific numbers in its annual report on how the TikTok ban in the US could negatively impact its financials. However, Evercore analysts estimate that the company It could lose between $480 million and $800 million (€488 million and €746 million) in income. year.
To arrive at these figures, Evercore takes two pieces of information into account. On the one hand, TikTok’s annual sales in the US market could reach around $16 billion (around €14,926 million). On the other hand, The social network allocates between 3% and 5% to pay for the costs of using cloud infrastructure..
Oracle headquarters in Austin (USA)
inspiration
For their part, UBS analysts adjust the range of bills Oracle receives annually for the services it provides to TikTok. In a report published last April, the company estimated that this number is Between 600 and 650 million dollars (between 560 and 606 million euros).
These amounts mean, in the worst-case scenario, Just over 1% of Oracle’s total revenueSpecifically, the company ended its last fiscal year, which ended on May 31, with sales of $53 trillion (about €49,492 million), an increase of 6% over the previous year.
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