ByteDance, the parent company of TikTok, is reportedly weighing the possibility of shutting down the popular video-sharing app in the United States instead of proceeding with a sale, according to sources cited by Reuters.
This decision comes in light of ongoing legal battles and recent legislation seeking to prohibit TikTok’s presence on American app stores.
Insiders familiar with the matter indicate that ByteDance is reluctant to include its crucial algorithms, which are integral to its overall operations, in any potential sale of TikTok. These algorithms are considered vital assets for ByteDance and its platform’s functionality.
The US President, Joe Biden, recently signed a bill into law that mandated ByteDance to sell TikTok within nine months or face a ban in the country. The legislation was introduced due to concerns over potential data sharing between TikTok and the Chinese government, claims that TikTok has consistently denied.
While TikTok’s contribution to ByteDance’s overall income and daily active users is relatively small, sources suggest that the parent company would prefer to see the app completely blocked in the United States as a last resort, rather than selling it to an American buyer.
The sources, who spoke on the condition of anonymity, emphasized that even if ByteDance were to shut down TikTok, its fundamental algorithm would remain accessible, and the impact on the company’s revenue would be minimal. When approached for comment, ByteDance declined to provide a statement to Reuters.
ByteDance released a statement via its media platform, Toutiao, clarifying that there are currently no plans to sell TikTok. This statement came in response to an article by The Information, which suggested that ByteDance was exploring options for selling TikTok’s US business while excluding the algorithm responsible for recommending videos to users.
TikTok’s CEO, Shou Zi Chew, expressed confidence in overcoming the legal challenges posed by the recently signed legislation. The social media platform currently boasts 170 million American users, and the US market reportedly accounted for about 25% of TikTok’s total revenues last year.
Understanding the significance of TikTok’s secret algorithm:
The algorithm powering TikTok’s operations is a vital component of ByteDance’s business, making a potential sale highly unlikely, as reported by Reuters. ByteDance is reportedly unwilling to part with one of its most valuable assets—the TikTok algorithm, often referred to as its “secret source”—in any potential sale to competitors.
This algorithm plays a critical role in curating content displayed on the “For You” page, tailoring videos to each user’s unique interests. However, critics in the United States have raised concerns, considering the algorithm a potential national security threat, as they believe it could enable third parties in China to spy on users.
