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Just what would an enterprise company like Microsoft or Oracle do with TikTok?

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By now you’ve probably heard that under pressure from the current administration, TikTok owner ByteDance is putting the viral video service up for sale, and surprisingly a couple of big name enterprise companies are interested. These organizations are better known for the kind of tech that would bore the average TikTok user to tears. Yet, stories have persisted that Microsoft and even Oracle are sniffing around the video social network.

As TechCrunch’s Danny Crichton pointed out last week, bankers involved in the sale have a lot of motivation to leak rumors to the press to drive up the price of TikTok. That means none of this might be true, yet the rumors aren’t going away. It begs the question why would a company like Oracle or Microsoft be interested in a property like TikTok?

For starters, Oracle is a lot more than the database company it was known for in the past. These days, it has its fingers in many, many pies including marketing automation and cloud infrastructure services. In April, as the pandemic was just beginning to heat up, Zoom surprised just about everyone when it announced a partnership with Oracle’s cloud arm.

Oracle isn’t really even on the board when it comes to cloud infrastructure market share, where it is well behind rivals AWS, Microsoft, Google, Alibaba and IBM, wallowing somewhere in single digit market share. Oracle wants to be a bigger player.

Meanwhile, Microsoft has successfully transitioned to the cloud as well as any company, but still remains far behind AWS in the cloud infrastructure market. It wants to close the gap with AWS and owning TikTok could get it closer to that goal faster.

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Simply put, says Holger Mueller, an analyst at Constellation Research, if Oracle combined Zoom and TikTok, it could have itself a couple of nice anchor clients. Yes, like the proverbial mall trying to attract Target and Nordstrom, apparently Oracle wants to do the same with its cloud service, and if it has to buy the tenant, so be it.

“TikTok will add plenty of load to their infrastructure service. That’s what matters to them with viral loads preferred. If Microsoft gets TikTok it could boost their usage by between 2% and 5%, while for Oracle it could be as much 10%,” he said. He says the difference is that Oracle has a much smaller user base now, so it would relatively boost its usage all the more.

As Mueller points out with the government helping push TikTok’s owner to make the sale, it’s a huge opportunity for a company like Oracle or Microsoft, and why the rumors have weight. “It’s very plausible from a cloud business perspective, and plausible from a business opportunity perspective created by the US government,” he said.

While it could make sense to attract a large user base to your systems to drive up usage and market share in that way, Brent Leary, founder and principal analyst at CRM Essentials, says that just by having a large U.S. tech company buy the video app, it could make it less attractive to the very users Microsoft or Oracle is hoping to capture.

“An old guard enterprise tech company buying Tiktok would likely lessen the appeal of current users. Younger people are already leaving Facebook because the old folks have taken it over,” Leary said. And that could mean young users, who are boosting the platform’s stats today could jump ship to whatever is the next big social phenomenon.

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It’s worth pointing out that just today, the president indicated support for Oracle, according to a Wall Street Journal report. The publication also reported that Oracle’s billionaire owner Larry Ellison is a big supporter of the president, having thrown him a fundraiser for his reelection bid at his house earlier this year. Oracle CEO Safra Catz also has ties to the administration, having served on the transition team in 2016.

It’s unclear whether these companies have a genuine interest, but the general feeling is someone is going to buy the service, and whoever does could get a big boost in users simply by using some percentage of their cash hordes to get there. By the way, another company with reported interest is Twitter. Certainly putting the two social platforms together could create a mega platform to compete more directly with Facebook.

You might see other big names trying to boost cloud infrastructure usage like IBM or Google enter the fray.  Perhaps even Amazon could make an offer to cement its lead, although if the deal has to go through the federal government, that makes it less likely given the tense relationship between Amazon CEO Jeff Bezos and the president that surfaced during the Pentagon JEDI cloud contract drama.

Apple has already indicated that in spite of having the largest cash on hand of any company with over $193 billion, give or take, it apparently isn’t interested.  Apple may not be, but somebody surely is, even some companies you couldn’t imagine owning a property like this.

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MICROSOFT

Microsoft will acquire Activision Blizzard Inc. for $68.7 billion

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Microsoft will acquire Activision Blizzard Inc. for $68.7 billion

Today, Microsoft announced plans to acquire video game maker Activision Blizzard Inc. for $68.7 billion. When the deal is completed, Microsoft will become the world’s third-large gaming company by revenue, behind Tencent and Sony, according to a company statement.

Game franchises from Activision, Blizzard and King studios that are part of the deal include “Warcraft,” “Call of Duty” and “Candy Crush.” Bobby Kotick will continue as CEO of Activision Blizzard. When the deal closes, the Activision Blizzard business will report to Phil Spencer, CEO, Microsoft Gaming.

Why we care. This is a giant acquisition for audiences and content production. Gamers will have new options as the industry shifts and continues to evolve. Subscribers to Microsoft’s Game Pass portfolio, for instance, will benefit from the launch of Activision Blizzard games into that service. But that’s just 25 million subscribers in Game Pass. Activision Blizzard boasts nearly 400 million monthly active players in 190 countries.

Looking ahead maybe two years or more, the metaverse promises to be an all but limitless virtual reality layer built on top of the internet. Gaming companies already have deep experience with in-game advertising, and the metaverse could take that space to a whole new level. Whether Microsoft has this in mind, we don’t know, but this acquisition boosts Microsoft Gaming’s position as one of the biggest gaming companies in the world.

Kim Davis contributed to this article.


Author

Chris Wood draws on over 15 years of reporting experience as a B2B editor and journalist. At DMN, he served as associate editor, offering original analysis on the evolving marketing tech landscape. He has interviewed leaders in tech and policy, from Canva CEO Melanie Perkins, to former Cisco CEO John Chambers, and Vivek Kundra, appointed by Barack Obama as the country’s first federal CIO. 

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MICROSOFT

Why Microsoft’s Cortana Was Almost Called “Bingo”

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Microsoft almost named its Cortana voice assistant after the Bing search engine. But, the company changes its plans after Steve Ballmer’s retirement.

While Microsoft discontinued the Windows Phone in 2017, its AI-enabled assistant Cortana continued to live on iOS and Android until March 31, 2021. Plus, it still exists in Windows PCs to this day.

In an interview by Alice Newton Rex, former Microsoft Product Manager Sandeep Paruchuri tells the origins of Cortana’s name and what it could have been named instead.

Cortana Was Almost Called Bingo

According to the Big Bets newsletter, Cortana was supposed to be called Bingo. Microsoft CEO Steve Ballmer wanted to name its new AI assistant after Bing in an ode to its search engine.

Ballmer reportedly wanted all its products to be Microsoft-branded. With Bing being a critical part of its AI recommendation system, it’s easy to make the connection with the name Bingo.

In addition, Microsoft’s AI assistant would be able to use its existing legacy branding to help propel its next generation of products.

Thankfully, Ballmer was on his way out, and his successor, Satya Nadella, had other plans. Not only was the AI-enabled assistant given the green light for release, but it also got to keep its much-loved name, Cortana.

The Role of Halo in Cortana’s Naming

Named after the fictional Halo character, also an AI assistant, Cortana was initially supposed to be just a name used in development. Serving as an advisor to the player character, Master Chief, Cortana is an in-game AI that every Halo player is familiar with.

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Acting as a metaphor, Sandeep mentioned how the development team believed she was the perfect metaphor for their goals, an assistant that was always looking out for you.

As featured in Microsoft’s 20th-anniversary documentary, Power On, Halo plays a crucial role in Microsoft’s history. With its release, Halo was a revolutionary title among FPS games, and it played a vital role in putting Microsoft’s Xbox on the map.

The massive PR frenzy that accompanied the leaked name of the AI as Cortana was too much to ignore. With long-time Xbox players and Halo fans behind it, Cortana became one of the selling points of its now defunct Windows Phone platform.

What’s in Cortana’s Name?

They say art imitates life, but in Microsoft’s case, it’s the opposite. Who could have known that an inside joke among developers could lead to naming one of its products after a video game character?

While Microsoft could’ve named Cortana after Bing, its leak saved us all the embarrassment of calling out Bingo out in public. Although Bingo would have been an interesting callback to Microsoft’s popular service, it doesn’t have the same futuristic ring as Cortana.

For this reason, Microsoft’s choice to choose Cortana over Bingo seems to be the better one. Unfortunately, it still couldn’t save Cortana from being shut down by Microsoft for good.

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MARKETING

Microsoft Advertising Launches Health Insurance Ads

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Microsoft Advertising announced a new ad format for Bing Search named health insurance ads. Microsoft said advertisers are already seeing a 4X increase in return on ad spend (ROAS) and lower costs per acquisition (CPAs) with this new format.

Microsoft Advertising Health insurance ads are “intent-triggered rich placements that provide real-time information to consumers and inspire action, all with no keywords required,” Microsoft said. These are positioned on the right rail of the Bing search engine results page running alongside mainline text ads, you can showcase your healthcare plans more prominently than ever.

Here is what they look like:

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Health insurance ads are dynamically generated based on the data you specify in your feed file, such as your plan type, the organization category, federal registration status, and URLs. The more details you provide in the feed file, the more information Microsoft can include in your ads.

These ads give you:

  • Customized ads: Submit and schedule your feed, and based on the attributes you provide, Microsoft will create relevant, personalized ads.
  • Improved return on ad spend: See more volume, increased click-through rates (CTR), and lower cost-per-click (CPC) rates.
  • Time-saving automation: With no keywords required, the ads are created by feed files that use Microsoft AI automation and are fully equipped for bulk upload.

To sign up for the beta for Health insurance ads, you first need to reach out to your Microsoft Advertising rep or contact the Microsoft support team. Once you are in the beta, you will need to provide a feed. A comprehensive feed with rich attributes such as image URLs and contextual keywords is critical for your success with Health insurance ads.

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Forum discussion at Twitter.

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