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What is TikTok? A bottomless pit of cat videos and dance tutorials, certainly. But it is also a tool to gain access to the brains of 170mn American internet users. That makes its fate a matter of great interest for rivals.
US Supreme Court judges are deliberating whether to uphold a law that forces the short-form video app’s Chinese owner ByteDance to divest or shut down TikTok by January 19. The ban focuses on the theory that China might use the app to manipulate US users. The company’s lawyers argue TikTok’s right to free speech is being unduly squashed.
If the law is allowed to run its course, one potential outcome is that TikTok goes “dark” in the US. This would probably happen over time, as users stopped getting app updates.
That is a net positive for peers, who would mop up content, users and the money that advertisers spend to influence them. The real prize is not TikTok’s existing ad revenue, which at $13bn or so is a drop in the bucket for Meta Platforms, owner of Instagram and Threads, or YouTube owner Alphabet, with their $510bn of combined turnover.
It is the company’s access to user brain space, though, that holds real value — a proxy not just for future advertising revenues, but also the potential to feed users into other products. Morgan Stanley analysts estimated that TikTok represented some 53bn user hours in 2022 — a number that will have since got even bigger.
A TikTok shutdown would benefit Meta the most, given the similarity of its Reels product. That would boost the Facebook owner’s ad revenue projections, but also give it troves of data to train its AI models, and more grist for its incipient push into virtual reality devices.
For founder Mark Zuckerberg, though, the biggest coup would be to buy TikTok outright. Others — including man of the moment Elon Musk — might also be interested. Based on Morgan Stanley’s analysis of hours spent on various platforms, swallowing TikTok whole would increase Meta’s total haul of user time online by about two-thirds.
The idea of Meta being able to buy a direct rival of that size would have been laughable mere weeks ago. Antitrust regulators tried to stop its acquisitions of much less consequential rivals, such as fitness app Within. But Meta’s recent political makeover, including a more hands-off approach to content moderation, is likely to make it far more palatable to the incoming Trump administration.
For now, ByteDance does not want to sell. If a shutdown really looms, it might change its mind. Perhaps the owner of Facebook, banned in China since 2009, could broker a mutually beneficial co-operation over content or revenue. If there is one quality an owner of TikTok needs, it is a shrewd understanding of how to influence the influencers.
john.foley@ft.com
