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What is TikTok? Indeed, it’s a bottomless pit of cat videos and dance tutorials. But it’s also a tool for accessing the brains of 170 million American internet users. As a result, its fate is of great concern to its rivals.
U.S. Supreme Court justices are considering whether to uphold a law that would force the short video app’s Chinese owner ByteDance to sell or shut down TikTok by January 19th. The ban focuses on the theory that China could use the app to manipulate U.S. users. The company’s lawyers argue that TikTok’s free speech rights are being unfairly violated.
If this law is left as is, one possible outcome is that TikTok will go dark in the United States. You will probably encounter this problem over time because users no longer get updates for your app.
This is a net positive for industry peers, who will wipe out content, users, and the money advertisers spend to influence them. The real prize isn’t TikTok’s existing ad revenue. Its ad revenue is around $13 billion, which is nothing compared to the combined $510 billion in sales of Metaplatform, owner of Instagram and Threads, and Alphabet, which owns YouTube.
But the real value is the company’s access to users’ brain space, which not only proxies future ad revenue but also has the potential to drive users to other products. Analysts at Morgan Stanley estimate that TikTok will have around 53 billion user hours in 2022, and that number will grow even higher in the years to come.
Given the similarities of Reels products, TikTok’s closure would benefit Meta the most. That would not only boost Facebook owners’ ad revenue projections, but also give them tons of data to train AI models and further impetus for early efforts in virtual reality devices.
But for founder Mark Zuckerberg, the biggest coup would be acquiring TikTok outright. Others, including the man of the hour, Elon Musk, may also be interested. Based on Morgan Stanley’s analysis of time spent on various platforms, swallowing TikTok in its entirety would increase Meta’s total online user time by about two-thirds.
The idea that Meta could acquire a direct rival of its size would have been laughable just a few weeks ago. Antitrust regulators have tried to block acquisitions of less important rivals, including fitness app Within. But Meta’s recent political changes, including a more liberal approach to content moderation, are likely to be far more palatable to the incoming Trump administration.
For now, ByteDance has no intention of selling. I might change my mind if closure really approaches. Perhaps the owners of Facebook, which has been banned in China since 2009, could broker a mutually beneficial cooperation over content and revenue. If there’s one quality a TikTok owner needs, it’s insight into how to influence influencers.
john.foley@ft.com
