If the law to ban TikTok from app stores in the US is passed, Bytedance may choose to shut down the app instead of selling it.
We recently told you about this decision, which became law with Joe Biden’s signature. However, since TikTok’s algorithms are very important for Bytedance, it is unlikely that the platform will be sold along with the algorithms.
Since TikTok has a small share of ByteDance’s total revenues and daily active users, the company may prefer to close the application in the worst-case scenario. This raises some questions. Here’s all we know…
Will TikTok be sold or shut down?
According to Reuters, ByteDance does not publicly disclose TikTok’s financial performance or the financial details of any of its units. Sources say the company makes most of its money in China.
“The US accounted for about 25% of TikTok’s revenues last year,” a source with direct knowledge, who asked not to be named, told Reuters.
Investors say it is difficult to determine TikTok’s worth compared to similar rivals Meta Platforms and Snap, as its financial data is not widely available or easily accessible.
How will the ban affect ByteDance?
Banning TikTok in the US may not significantly impact ByteDance’s business, but it could hinder the company’s growth in the US market. The ban will cut off TikTok’s access to its 170 million users in the US, making it harder to gain new users. ByteDance’s advertising revenues in the US will also be directly affected by the ban.
TikTok’s ban in the US poses a significant challenge for ByteDance and TikTok. The company may be forced to sell or shut down the platform. The ban could hinder TikTok’s growth in the US market and have a significant impact on ByteDance’s total revenues. How ByteDance will overcome this challenge and TikTok’s future in the US will become clear in the coming months.
Featured image credit: Claudio Schwarz / Unsplash
