Bytedance's lip-syncing app TikTok claims $50 bn-plus valuation
03 August 2020
China’s Bytedance is trying to make a fortune out of TikTok, which has hooked millions of young people across the world to dancing and lip-syncing video clips, as social media thrive on people’s fancies.
Recent reports suggest that TikTok’s current valuation has, in fact, fallen to around 50 billion against its earlier valuation of over $100 billion.
Bytedance is reportedly attempting distress sale of TikTok amidst obstacles in its major markets, including India and the United states. While India has banned the app that gets people share lip-syncing videos to pass time, US President Donald Trump sees Chinese state hand in the app and wants it banned.
Trump’s decision to crack down on the popular video-sharing app is more because of the suspicious nature of Chinese internet applications. US officials have said that TikTok could be a tool for Chinese intelligence - a claim ByteDance denies.
Meanwhile, the coronavirus pandemic seems to have helped Bytedance increase the popularity of TikTok, especially with young audiences - an estimated one billion worldwide - who create and watch its short-form videos.
And, as the Indian ban on the app approached, it has been growing even faster as the coronavirus pandemic pushed people physically away from each other, but into close contact online.
While reports on Friday said Trump has proposed to impose a ban on TikTok, earlier media reports had suggested Trump would require that the app’s US operations be divested from ByteDance.
Trump’s announcement drew criticism from some in the tech sector, including former Facebook chief security officer Alex Stamos, who questioned whether the move was spurred by national security concerns.
“A 100 per cent sale to an American company would have been considered a radical solution two weeks ago and, eventually, mitigates any reasonable data protection concerns,” he wrote on Twitter.
However, it now seems that prospective buyers are also wary of dealing with Chinese internet applications because of suspected state influence.
Microsoft, which was in negotiations to buy the US operations of TikTok, seems to have developed cold feet and has put the plans on hold after President Donald Trump threatened to bar the social media app and came out against the sale, the Wall Street Journal reported on Saturday.
“Before Mr. Trump’s remarks, the two sides believed the broad strokes of a deal could be in place by Monday,” the paper reported on a possible TikTok-Microsoft sale, citing unnamed sources.
It also said Trump’s threats and opposition to the deal had prompted TikTok to make further concessions, including adding up to 10,000 jobs in the US over the next three years.
TikTok defended itself on Saturday, with its general manager for the US, Vanessa Pappas, telling users that the company was working to give them “the safest app,” amid US concerns over data security.
“We’re not planning on going anywhere,” Pappas said in a message released on the app.
TikTok also has support from the American Civil Liberties Union spearheading a new movement called `Black lives matter’, which cried foul over the possibility of a ban on the app.
“Banning an app that millions of Americans use to communicate with each other is a danger to free expression and is technologically impractical,” said the ACLU’s surveillance and cybersecurity counsel, Jennifer Granick.
“With any internet platform, we should be concerned about the risk that sensitive private data will be funneled to abusive governments, including our own,” Granick said in a statement.
“But shutting one platform down, even if it were legally possible to do so, harms freedom of speech online and does nothing to resolve the broader problem of unjustified government surveillance.”