ByteDance is reportedly considering closing TikTok in the US if it exhausts all legal avenues to combat the ban imposed on the platform. According to sources familiar with the matter, if ByteDance fails to reverse the law prohibiting TikTok from app stores, the company may opt for shutting down the app altogether.
Algorithm Dilemma and Revenue Share
One of the challenges facing ByteDance is the complex issue surrounding the app’s recommendation algorithm, which is integral to its operation and is also utilized in other products owned by the company. Despite discussions about potentially selling TikTok, concerns arise over transferring this algorithm to an American buyer. ByteDance has emphasized the algorithm’s significance by refuting rumors about a possible sale without it on its media platform Toutiao.
Reports suggest that TikTok contributed only 25% of ByteDance’s total revenue last year, with the majority coming from other apps like Douyin in China. Additionally, TikTok’s daily unique user share in the US accounts for just 5% of all ByteDance apps. Consequently, the closure of TikTok in the US is projected to have minimal impact on the company’s overall business operations.
Legal Battle and Future Prospects
Previously, the US government issued a mandate requiring ByteDance to divest TikTok by January 19. However, Shou Zi Chew, CEO of ByteDance, remains optimistic about the app’s future, anticipating a favorable outcome in the courtroom to lift the ban, notes NIX Solutions.
In conclusion, ByteDance faces a critical decision regarding the fate of TikTok in the US amid ongoing legal battles and revenue considerations. As the company navigates these challenges, we’ll keep you updated on any developments regarding the app’s status.