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ByteDance investors value TikTok at $50B in takeover bid
- wdb 6y ago$50B for TikTok sounds a lot. I am wondering how they want to keep TikTok attractive for the audience. Would it hit a similar fate as Snap?
- snazz 6y agoWhat fate are you referring to with Snapchat? I’m pretty close to the target audience for both Snapchat and TikTok and nearly everyone I know (edit: close to my age) uses both.
- agustif 6y agoSnapchat monetization strategies? It's easier to be fresh if you don't need to make a buck from ad sales
- djxfade 6y agoSnapchat does sell ads. They are features stories, and also sometimes shown between stories
- cooljacob204 6y agoStories which sole purpose is to advertise stuff...
- 14 6y agoWhat is the age group they target? I am not 40 and don’t know a single person with snap anymore. None of my kids or their friends so is it like 15-25 year olds or who uses snap now days? Thanks
- creaghpatr 6y agoThey have more 13-14 yr olds in the US than Facebook or Instagram; that was announced at their conference a month ago. Almost everyone under the age of 18 I know has it, idk about usage compared to apps like tiktok though.
- wavesounds 6y agoTypo: 13-24 yr olds
- kart23 6y agoHuh? Literally everyone in college still has snapchat. A lot less people are on tiktok. There are definitely people who use it, but it's not considered fully mainstream and 'popular' yet.
- cambalache 6y agoYou are really out of touch with your kids and their friends then.It happens.
- rodiger 6y agoFate similar to Snap? $SNAP is doing just fine and is up 38% this year. 17% DAU growth in the past year. I'm sure TikTok would be thrilled to have 17% user growth and increasing revenues 9 years down the line.
- andreilys 6y agoIt’s still well below the IPO price in 2017, with net loss growing to $326 million, up from $255 million last year and EBITDA of almost -$1 billion. Sure DAU is up, but we all know those metrics are inflated BS and monetization is all that really matters. It’s been 3 years since IPO and they’re still making a heavy loss.
- BlackjackCF 6y ago$50B sounds like a lot, especially in the face of pressure from the US and a lot of people leaving the platform due to privacy reasons. We've also learned from Snap at this point not to overvalue social media. I think they really should take the $1B offer and go.
- cycrutchfield 6y agoA $33b company should take a $1b offer?
- Snackchez 6y agoIsn’t Vine a better comparison to TikTok, instead of Snap?
- adwi 6y agoComparing their current metrics, no.
- rydre 6y ago$50B seems too low for TikTok. It could be atleast as big as Facebook in the next five years. $200B min if investors are serious.
- mobilio 6y agoOR could follow Snap fate?
- rydre 6y agoNo, it's going to be bigger. I know most people dont use snap but they use tiktok. Everyone young uses tiktok. It's much bigger than snap could have ever hoped. TikTok is FAANG tier company. If I were the founder, I'd go the Chinese government and ask them to ban Tesla and put tariff on Apple in retaliation. Tell the U.S. to play free market like they claim. Or lost access for it's companies. TikTok deserves it's success fully. It's very unfair that the U.S. government is insistent on blocking it. It's not a monopoly. It's not a dirty company. Virtually all of its "privacy violations" are the same violations done by Google, Facebook. Break up BigTech instead of hitting a creative startup.
- shrewduser 6y agolol, yeah ok bud.
- FooBarWidget 6y agoI really doubt Tiktok's founder has that sort of leverage/power over the Chinese government. The current Chinese regime makes rational decisions, I doubt they'll think banning Tesla and Apple in order to protect Tiktok is worth it from a cost/value ratio point of view. Huawei is way more valuable to the Chinese government, and they didn't ban US companies in retaliation either.
- rydre 6y agoTikTok will serve the purpose to Chinese government that Hollywood served for America's elite. It's worth every penny for softpower.
- mobilio 6y agoBut what are their income to calculate PE? It's easy to see overvaluation there.
- alehul 6y agoMany are suggesting that TikTok would be overvalued at $50B. If that's the case, do you believe FB is overvalued at $662B? Instagram, as of 2018, was estimated to be worth around $100B on its own (with about 1b MAUs, versus TikTok's 800m). TikTok seems at least equally addictive, and its algorithm does a fantastic job at quickly showing good content that matches your interests.
- pjc50 6y ago.. and how's the revenue?
- alehul 6y agoGood question - TikTok generated $176.9m revenue in 2019, but it's still in its infancy in terms of generating revenue. Instagram, acquired for $1b in 2012, had $0 revenue. WhatsApp, acquired for $19b in 2014, had $10.2m revenue. Based on TikTok's usage-per-day and active users being comparable to Instagram, they could presumably generate ~similar revenue if focused on it. With these types of apps, growth comes first, and profitability comes later (and the profitability step seems to come easily, unless FB cannibalizes you).
- cj 6y ago[removed comment to add the following] Where are you getting the $176mm figure?
- basseq 6y agoAlso, from the article: "The investors’ bid values TikTok at 50 times its projected 2020 revenue of about $1 billion..." So that's a projected revenue growth of 465%. That's still projected, but a big number.
- rydre 6y agoProjected revenue for 2021 is $6b. $50B valuation is robbery at day sight by investors. TikTok's China sibling Douyin is projected to make $28 billion this year in China.
- chvid 6y agoThis is from Twitter and might be a hyperbole or conspiracy: Overheard on current US war on Tiktok. A thread: Talks abt ban on Tiktok subsiding a bit because Tiktok in talks with General Atlantic and Sequoia to sell to a US shell company. US demanding that Tiktok technical staff be completely changed, AI algorithm be based in the US... Continued at https://twitter.com/CarlZha/status/1288284750273114112 https://twitter.com/CarlZha/status/1288284750273114112
- eunos 6y ago> AI and tech team evaluated by NSA Suppose that PRC considers to open the GFW but with the same requirements (AI and tech team evaluated by MSS). Would that be acceptable?
- chvid 6y agoThat sounds like a good deal. I will ask my higher ups.
- deleted 6y ago[deleted]
- pjc50 6y agoThat is a terrible deal, because it amounts to letting them clone your technology in depth. On the other hand, until the US kicked over the table, the UK had a national security oversight centre for Huawei where people with UK security clearances performed code review ..
- 3pt14159 6y agoYeah but they don't pretend that it is foolproof. It's the typical government "we have to do something" answer to a fundamental problem. Software defined networks are not secure from state level interference and everybody in tech that is honest knows it. And since they are not secure, and not easily monitored with strong encryption they're the perfect delivery vector for targeted malware. I wish we had the political will in the liberal alliance to say no to networking gear originating from countries like China.
- nl 6y agoIt's a bit amusing to see all the "suffer Snapchat's fate" comments here. Snapchat has recovered from the low point at the end of 2018 when FB/Insta had copied the stories feature and all seemed lost. Their traffic is up, stock is up and revenue is growing quickly again ($1.18B in 2018 -> $1.72B in 2019).
- chvid 6y agoIf you look at the graphs in this article on the use and explosive popularity of TikTok you can see that TiKTok currently dwarfs all other social media in the US market wrt. downloads, time spent in app pr user, user growth. https://www.ft.com/content/c6a8b9bc-dd6d-46a7-b008-8255689825e0 https://www.ft.com/content/c6a8b9bc-dd6d-46a7-b008-825568982... TikTok’s rampant growth strikes wrong note with US
- nomel 6y agoOr, if they allegations are true, you could look at this as "rampant growth in data harvesting".
- justicezyx 6y agoThat's definitely true. Chinese corps generally have a much lower standards on privacy. Because they were subject to lower standards when they started in domestic China.
- hellomyguys 6y ago50B would be a steal imo. Don't get me wrong, this is still the early days for TikTok, but as a platform, TikTok seems way more compelling and interesting than Instagram at this point. Especially for younger people who are tired of the social behavior that's formed on IG. Even though the user base is primarily younger folks, they're doing a good job of aging up too. Core product value is way easier to deliver than Snap for older people.
- mschuster91 6y ago> Especially for younger people who are tired of the social behavior that's formed on IG. Eternal September: what has happened to Instagram will also happen to TikTok. Additionally there is the very real risk that TikTok will be seen by governments as what it is: Chinese spyware. India has already banned it, I hope that the rest of the world follows suit.
- hellomyguys 6y ago>Additionally there is the very real risk that TikTok will be seen by governments as what it is: Chinese spyware. India has already banned it, I hope that the rest of the world follows suit. Well that's why the investors are trying to take it over. >Eternal September: what has happened to Instagram will also happen to TikTok. Definitely agree this is always a concern, but the type of content that is rewarded on TikTok makes it less exploitable by people who build followings by posting low-effort content that looks good aesthetically.
- mschuster91 6y ago> Well that's why the investors are trying to take it over. As long as China has anything meaningful to say, that won't be enough. > but the type of content that is rewarded on TikTok makes it less exploitable by people who build followings by posting low-effort content that looks good aesthetically. Lol most of the stuff that goes viral on Tiktok is essentially that. People scaring cows ffs (look up "kulikitaka challenge"). Can't get much more "crap" than this.
- paulpauper 6y agoThese ppl who say tech is a bubble need to give it a rest. They have been saying since 2009 that Amazon, Tesla, Facebook, Uber, AirBNB, Instagram, etc. are a bubble, and have wrong ever since as valuations keep rising. The pandemic has only made apps more valuable, due to physical stores being closed and unemployed people having more free time to use apps. They, these bubble forecasters, were only right in the 80s (video game and PC bubble) and late 90s (dotcom and communications bubble) but this time really is different. A reason is, an individual's daily time on social media and apps can be divided into arbitrarily tiny slices or overlapping slices, so this allows many huge companies to make money, as opposed to the finite constraints of hardware companies faced in the past (you cannot spend an hour simultaneously playing on a Sony, Sega and Nintendo system; you have to choose one or split it up). So imagine if someone has 1 hour/day uninterrupted to spend on apps and social networking, so this can be at home, or during lunch, etc. A person who uses that hour on multiple social networks and apps gets exposed to each network/app's ads, so now rather than seeing only an Instagram ad or Facebook ad, now sees a TikTk ad, a Snapchat ad, etc. Many people keep 5+ social networks open at once and get exposed to all their respective ads. It is sorta like watching TV and listening to the radio at the same time and getting both the TV and radio ads.
- socalnate1 6y ago"But this time really is different." Sigh...
- philosopher1234 6y agoCould you explain why you disagree?
- soulofmischief 6y agoYou're sampling a 10-year span according to your argument. That's not enough time to ascertain if this is a bubble. I'd hold off on making assertive comments about the trajectory of Silicon Valley for now.
- nl 6y ago$50B sounds realistic. Snapchat is a $33B company, with 30% yearly revenue growth and similar demographics to TikTok. TikTok has a lot more active users than Snapchat and is growing much faster. It's the only non-FB app in the global top 5. That alone makes it an attractive investment as a hedge. Take a look at the stats: https://mediakix.com/blog/top-tik-tok-statistics-demographics/ https://mediakix.com/blog/top-tik-tok-statistics-demographic...
- dangArino 6y agoi think snap had higher DAU while tik tok has higher MAU
- ideals 6y agoI'm more surprised this is actually moving forward. I thought the usual play is to delay things for as long as necessary until people lose interest and find a new target. If they stalled until the election would there still be interest from lawmakers on this topic? Or is it topical for the moment because of China and Covid?
- bigpumpkin 6y agoActually banning it would create some backlash from part of the userbase in an election year, whereas more regulations would be welcomed by mostly everyone (such as requiring data/algorithms/engineers to be based in the US).
- dilap 6y agonot every1, tho! as a US citizen, I think it's actually a good thing if there are some popular social networks not under US govt control.
- deleted 6y ago[deleted]
- chirau 6y agoContrary to what I am realizing is a common misconception in this thread that $SNAP is struggling, it is actually doing very well.
- andreilys 6y agoIt’s still well below the IPO price in 2017, with net loss growing to $326 million, up from $255 million last year and EBITDA of almost -$1 billion. Perhaps our definitions of doing well are different. Sure DAU is up, but we all know those metrics are inflated BS and monetization is all that really matters. It’s been 3 years since IPO and they’re still making a heavy loss.
- cycrutchfield 6y agoIPO price was $17. Current price is almost $23.
- throwaway_pdp09 6y agoPutting that figure another way, fifty thousand million dollars. That would have sounded insane to me last xmas, now a few months on watching the economy deflate, more so. I guess economists must know more than a mere programmer like me.
- bigpumpkin 6y agoIntuitively, I don't see Zhang Yiming giving up control so easily, like most founders. Especially considering an election is coming. The US is likely to up its pressure a lot from its current stance, before a negotiated settlement could be made.
- jialutu 6y agoAll of this reminds me of what happened to Toshiba in the 80s: https://www.anti-empire.com/today-the-us-is-waging-a-war-on-huawei-in-1987-it-was-japans-toshiba/ https://www.anti-empire.com/today-the-us-is-waging-a-war-on-... Just goes to show that the US is as much the thug as it has always been.
- nnm 6y agoThere is limited eye time. TikTok is on the path to winner-takes-all in the space it is currently in. I would value it at $300B given its huge potential that none of its competitors or copiers can have. $50B is low imo -- likely caused by the political pressure.
- whymauri 6y agoWhat is stopping TikTok from getting flavor-of-the-month'd as teenagers and young adults move to newer platforms? Edit: this is a genuine question I do not have an answer for and I'd like to hear some takes.
- chvid 6y agoNetwork effects ... same way the old folks ain’t moving away from fb ...
- _6fmb 6y agoAs said in some other comments, TikTok does not use a "follow" model, new content is algorithmically recommended to you. Therefore there is no problem with the content creators you're following burning out or your follow list getting stale. For example my highschool friends are no longer that active on facebook, and in 2020 I'm no longer asking random people to add me to FB, therefore facebook is now kind of dead to me. My youtube follows like Ryan Higa etc are burned out, hence youtube is less useful for me. That'll never happen with TikTok because my follows list is irrelevant. I see pretty much only fresh faces with content I'm interested in.
- _6fmb 6y agoWay undervalued. One chart to explain why the US is doing this: https://imgur.com/a/PnmijVz https://imgur.com/a/PnmijVz
- scott31 6y agoYour graph does not tell anything about absolute values. My shitty app has grown 400% in that timeframe, by your metric it should be values at least 200$ billion?
- _6fmb 6y agoDisingenuous silliness to compare TikTok to a "shitty app". I googled and found this page (not sure how correct it is). https://wallaroomedia.com/blog/social-media/tiktok-statistics https://wallaroomedia.com/blog/social-media/tiktok-statistic... USA 20 Million MAU in 2018, estimated 70 million in 2020?
- rezeroed 6y agoI don't understand the tiktok interest. I installed it some months ago, used it for a few hours a day for about a week, then stopped, never returned.
- rezeroed 6y agoThanks for the conversation.
- dorafmon 6y agoWhy this report is 50B while a recent BBG report said 100? https://www.bloomberg.com/news/articles/2020-05-20/tiktok-owner-s-value-surpasses-100-billion-in-private-markets https://www.bloomberg.com/news/articles/2020-05-20/tiktok-ow...
- weston 6y agoI believe the article originally posted is referring to TikTok’s valuation as a standalone product, should it be spun off. Whereas the link you posted is about the valuation of parent company ByteDance.
- bigpumpkin 6y agoBytedance is the parent company. It has apps other than TikTok. Douyin, basically the Chinese version of TikTok is one. Toutiao, a news aggregator, is another.
- paulpan 6y agoIt's sort to sad to see TikTok being forcibly sold off due to geopolitical factors, rather than on more business ones (e.g. competitiveness). Despite the controversy with its personal data leakage, TikTok has been massively successful and put the established players like Facebook, Twitter and even YouTube on alert. Competition forces companies to improve and just as we need Android to hold iOS accountable, etc TikTok is a good counterbalance to Facebook. Another dimension is that the tech space is either dominated by U.S. companies or regionally segmented (e.g. Whatsapp in Europe, Wechat in China). TikTok was exciting as a non-U.S. product that grew viral globally. If ByteDance is forced to sell to a U.S. company, then it's back to the status quo.
- fokinsean 6y ago> due to geopolitical factors They kind of dug themselves in hole with how sketchy the app is
- borg_ 6y agoand how sketchy exactly is it?
- Baeocystin 6y agohttps://www.privateinternetaccess.com/blog/tiktok-seems-to-be-copying-and-pasting-your-clipboard-with-every-keystroke/ https://www.privateinternetaccess.com/blog/tiktok-seems-to-b...
- borg_ 6y agohttps://www.theverge.com/2020/7/3/21312821/linkedin-app-ios-14-clipboard-copying-fix https://www.theverge.com/2020/7/3/21312821/linkedin-app-ios-... This does not seem specific to tiktok at all. Would you jump in on discussions on LinkedIn and claim "Not surprised, given how sketchy LinkedIn is?"
- fokinsean 6y ago
- cambalache 6y agoNo matter what the future may bring for TikTok, it has surprised me because it definitely showed that the Chinese are coming with their unicorns and coming hard. I was expecting something like that but in a decade or so. You can argue that is not that technically advanced and slightly derivative, but its explosive growth, smart user engagement tactics, polished presentation (a constant weak point with Chinese products) is nothing short of amazing.
- capableweb 6y agoName one US unicorn that is not "not that technically advanced and slightly derivative". Basically all the work developers are doing nowadays is in one or another building on the shoulders of giants ("slightly derivative")
- cambalache 6y agoSpaceX. In any case there is nothing wrong with being "slightly derivative", especially since the concept is really vague, but there are still degrees. So I would argue that what SpaceX, Tesla or DeepMind(Google) are doing is more difficult and challenging comparing to what tik-tok, twitter or instagram do. Even if you claim all work is derivative.
- atian 6y ago“How did you go bankrupt? Two ways. Gradually and then suddenly.”
- luckylion 6y agoThere's a documentary People's Republic of Desire that I recommend to anyone who thinks China is pretty behind on tech and basically just a manufacturing giant. They're not. Social Streaming on Twitch for cheers & donations? Yeah, they've been doing it for years on their own platform. I'm not surprised at all that they find international success. Any very large domestic market will create viral products and give their makers enough money and reach to go global.
- 6y ago
- neximo64 6y agoI think this is extraordinarily cruel & I can see lots on these comments where people agree but are divided (probably the ones who disagree are from the US) As someone who grew up outside the US or a western country I don't really see anything wrong with TikTok. If they do something Facebook or Google or your runt of the litter tracking script will do it. I am also not brought up in China or a country involved in this dispute so feel I have a neutral view. What I see as torturously unfair that this founder made a great startup and app that people do enjoy to consume. Because it simply isn't from a western country he must be bought out at some crappy valuation (which he probably doesnt even want to do) simply because this is the first foreign tech company to do well in the US that isn't from a western country. If this happens where TikTok is banned/has to sell, etc. I would feel it completely reasonable that India, Africa, China, some small Eastern European country, SE Asia forces a US company to sell down its local operations at a price they dictate to a local business. WhatsApp for example should be forced to sell its Indian operations to Reliance Industries. Don't any of you think that sounds rather unfair to Facebook?
- qeternity 6y agoBytedance is not some startup launched in the basement by founders living on ramen noodles. It’s a product of the CCP.
- borg_ 6y agocitation needed. It's truly amazing how people justify arbitrary claims to fit their ideological perspectives.
- 3FBD4FDE 6y ago> Because it simply isn't from a western country That's a false projection. For example, products from Korea and Japan are very popular in the US. App from those countries would have no problem. China is qualitatively different. > must be bought out at some crappy valuation Nobody is forcing the sale, they also have the option to stop operating -- like Google chose to do re: China when they refused PRC demands. > WhatsApp for example should be forced to sell its Indian operations to Reliance Industries You mean like how US companies are forced to vest technology with local partners to operate in China? https://money.cnn.com/2018/04/05/news/economy/china-foreign-companies-restrictions/index.html https://money.cnn.com/2018/04/05/news/economy/china-foreign-... For example, non-Chinese companies cannot sell electric cars in China without handing over their trade secrets. Is that fair?
- dangArino 6y agohow can they be worth twice as much as snap with less revenue and less users?
- yurlungur 6y agoIf I was the management of bytedance I'd at least hold on until next year. A deal made today is definitely gonna be a pretty bad one given the tremendous political pressure.
- pbhjpbhj 6y agoI wonder if anyone will be able to create a community that's valued as a community rather than only valued as a medium through which to hawk products. What might be achieved with new communication systems that are principled and directed towards humanity instead of private financial profit?