Heaptalk, Jakarta — After the President of the United States (US), Joe Biden, officially signed a law requiring ByteDance to sell TikTok in the US to continue operating in Uncle Sam’s country, TikTok’s parent company is reportedly exploring other scenario to sell the apps without its algorithm, the Information reported.
However, the company’s management has denied the rumors, as TikTok’s algorithm is one of its valuable assets, and it consists of user data and product operations and management. As is known, the TikTok algorithm allows users to get personalized video recommendations. Nevertheless, ByteDance also affirmed that separating the algorithm from TikTok’s app’s US assets is a complicated procedure.
“Rumors regarding the company’s plans to explore selling TikTok are untrue,” ByteDance affirmed, cited in Katadata.
According to anonymous sources, TikTok’s recommendation algorithm is also mostly shared by ByteDance’s other app, Douyin, which was released in 2016. However, the company is frequently emphasized that these apps are different. The company also claimed the algorithms are better than those of ByteDance rivals, such as Tencent and Xiaongongshu.
Backed by Sequoia Capital, Susquehanna International Group, ByteDance has experienced a fantastic enhancement in recent years, becoming one of the most valuable companies worldwide. TikTok’s parent company revenue climbed to nearly US$120 billion last year, compared to the former, which was only US$80 billion in 2022.
From this output, ByteDance claimed that TikTok contributes only a small portion of its total revenue and number of users. For this reason, the company affirmed that closing the application in the United States is the most probable decision that China’s ByteDance will make.
Moreover, the Guardian reports that TikTok’s Daily Active Users (DAU) in the US comprise only about 5% of ByteDance’s DAUs worldwide. Meanwhile, the US market accounted for only 25% of TikTok’s revenues last year.
“TikTok US is a tiny part of the overall business. It is an exciting part of the story, for sure, but.. relative to the overall size, it is a tiny part,” ByteDance’s Investor Mitchell Green, of US-based Lead Edge Capital, cited in CNBC.
