TikTok rakes in $16 billion in US revenue as Washington threatens ban – FT

TikTok, the ByteDance-owned viral video app that has captivated Gen Z users, has reached a staggering milestone, hitting $16 billion in sales in the United States, as reported by the Financial Times. Despite its soaring revenues, TikTok finds itself at a critical juncture as regulatory scrutiny and geopolitical tensions threaten its future in the US.

In 2023, TikTok achieved record revenues in the US, a testament to its growing influence in the American market. However, amidst Congressional efforts to compel a sale of the platform to an American entity, TikTok faces uncertainty regarding its continued operations in the country. The proposed legislation, if enacted, could force TikTok into the hands of a non-Chinese buyer within six months or risk expulsion from US app stores.

ByteDance is poised to surpass Meta, the owner of Facebook, as the world’s largest social media company by sales. Reports suggest that ByteDance amassed a staggering $120 billion in revenues in 2023, driven primarily by TikTok’s explosive growth. Although the majority of ByteDance’s revenues originate from China, TikTok’s immense popularity in the US has contributed significantly to its financial success.

The prospect of TikTok’s forced sale has attracted potential suitors, with former Treasury secretary Steven Mnuchin expressing interest in assembling a consortium to bid for the platform. However, any acquisition would come at a substantial cost, potentially valuing TikTok US at up to $150 billion. Moreover, securing approval from Beijing adds another layer of complexity to any potential deal.

Beyond its financial implications, TikTok’s uncertain future in the US could reverberate globally, impacting the app’s user base and content ecosystem. The withdrawal of American influencers and celebrities could diminish the app’s appeal worldwide, highlighting the interconnectedness of TikTok’s user community across borders.

Geopolitical tensions between the US and China further complicate TikTok’s predicament, with Beijing vehemently opposing any forced sale of the platform. The enactment of legislation targeting TikTok could lead to a ban in the US, prompting the company to mobilize its user base in protest against the proposed measures.

In 2023, TikTok emerged as the dominant force in social media app downloads within the United States, securing the top spot with an impressive 47 million downloads, according to Sensor Tower. Following closely behind were Facebook and Instagram, claiming second and third place with 35 million and 34 million downloads, respectively. 

Written by Maya Robertson


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