ByteDance, the parent company of TikTok, is reportedly considering shutting down the app in the US rather than selling it, as per Reuters, which cited four sources.
This development arises as ByteDance encounters legal obstacles due to legislation aiming to prohibit the platform from US app stores.
Sources familiar with the situation suggest that selling TikTok along with its vital algorithms is improbable, given that these algorithms are deemed indispensable to ByteDance’s overall operations.
Recently, US President Joe Biden signed a bill into law that seeks to ban the social media app in the country.
The measure, previously sanctioned by the US Congress, required ByteDance, headquartered in China, to divest the app within nine months or face a ban from the US.
This legislation stemmed from apprehensions that TikTok could potentially share user data with the Chinese government—a contention consistently refuted by the company.
Despite TikTok representing only a fraction of ByteDance’s total revenue and daily active users, the parent company purportedly favors the app’s blockade in the US as a last resort rather than selling it to an American purchaser.
The sources, who requested anonymity as they were not authorized to speak to the media, indicated that even if ByteDance were to shut down, its fundamental algorithm would remain accessible, and the closure would have minimal impact on the company’s revenue.
Reuters reported that ByteDance declined to provide a comment.
In a statement released on Toutiao, a media platform owned by the company, ByteDance clarified on Thursday that there are no intentions to sell TikTok.
This statement follows an article by The Information, a US-based publication focusing on technology and industry, which suggested that ByteDance is exploring options for selling TikTok’s US business, albeit without the algorithm responsible for recommending videos to users.
In response to Reuters’ inquiry, a TikTok representative directed attention to the statement issued by ByteDance on Toutiao.
TikTok’s CEO, Shou Zi Chew, voiced assurance on Wednesday that the social media platform would effectively navigate through legal hurdles posed by the legislation signed into law by Biden.
Currently, TikTok enjoys a user base of 170 million in the United States.
TikTok’s algorithm is indeed a closely guarded secret and a key component of its success. While the exact details of how it works are not publicly disclosed, it is known to utilize a combination of machine learning, user interactions, and content preferences to curate the “For You” page for each individual user.
The algorithm analyzes factors such as the content a user engages with, the accounts they follow, the videos they like, share, or comment on, as well as other behavioral signals to recommend content that is likely to be of interest to them. This personalized approach is what sets TikTok apart from other social media platforms and contributes to its addictive nature.
ByteDance’s reluctance to sell TikTok without including its algorithm highlights its importance as a strategic asset. This stance reflects concerns over losing a competitive advantage and potential compromises to user experience if the algorithm were to fall into the hands of competitors. Additionally, the algorithm’s role in content moderation and the potential implications for national security have further heightened scrutiny and debate surrounding TikTok’s operations, particularly in the context of its ownership by a Chinese company.
