Many 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.
At this point, give how wrong over the past decade pundits have been about Tesla, Uber, Facebook, Shopify, Amazon (and many others), I am inclined to discount/ignore any prediction of a rapidly-growing consumer tech or app company being a bubble. These pundits have a horrible track record of predicting this sort of stuff. A common thread for why these forecasts tend to be so bad is, such pundits ignore the growth of free cash flow and operating profit margins, erroneously lumping one-time expenses as being the same as a recurring cost. Yes, they can both make a company lose money, but a company that does not incur recurring advertising and other expenses is in a much better position than a company that loses money on every sale/user-acquisition and tries to make it up on scale. This was the problem with Groupon and also Fab. They advertised heavily on Facebook in 2010-2011, paying way more in recurring costs to acquire users then they could ever hope to recoup from sales. If you are paying $1-2/click (Facebook ads are expensive, especially for US adult traffic) and given all the click fraud and fake likes, maybe only 1/50-1/100 convert, if you cannot extract at least $100 of value from each user, you die.
A bear would say those pundits have been wrong so far and will eventually be proven right.
Is there any real reason why Tesla should be worth more than the rest of the US auto industry combined? Can Uber ever actually turn enough profit to justify their valuation? At what point does Amazon stop growing and their PE ratio start mattering?
Right now investors seem to believe that these companies have a very bright future ahead of them. Some of these companies have had “a very bright future” for over 20 years now. Some of these companies have very bright futures even though they’re only supported by investors and have never made any money of their own. Uber, for example, lost $8.5b in 2019 and are surely going to lose a ton this year too.
In the long run, how many SV unicorns and traditional companies pretending they’re tech companies will actually prove their valuation was right? A bear would say very few.
> Is there any real reason why Tesla should be worth more than the rest of the US auto industry combined?
I think this is like asking "Should Amazon be worth more than all e-tailers combined?" circa 2009. Both of their businesses are growing in tangential directions to their core business. In just about 5 years, AWS turned from some "nice supplemental income" to becoming the company's new core product.
The Tesla bulls are betting that Tesla's energy collection and storage products will grow to eclipse their car business and take advantage of the economy of scale of the GigaFactories. The bears are only looking at Tesla as a niche car company.
If Amazon stock fell to the price when pundits were calling it a bubble back in 2010-2014 and earlier, it would actually be undervalued. Earnings are surging along with the stock price. The same will probably be the case with Tesla.
Sure. If valuations continue to go up forever, at some point they're over valued. The point was that those predictions have been silly in retrospect.
DHH had a widely shared post where he said FB wasn't worth $33B+ and it could never be. He was clearly wrong (off by an order of magnitude). Eventually there will be some overvalued companies (WeWork before the valuation plummeted might be a good example). But given how many bear predictions have turned out to be really wrong, it's good to be skeptical of similar arguments going forward (they won't always been wrong, but some have been spectacularly wrong).
Fab at least grew so fast and did an absolutely terrible job at it. Invested in warehousing and competing with Amazon in terms of options and delivery.
Money was treated as endless, each employee was given a membership to Equinox for example, ~200/month per employee, let alone all the other mindless expenses.
Young employees were given free reign to buy whatever they thought would sell, which lead to massive stockpiles of crap they had to sell away.
I bet Fab would have been successful if it was managed in any type of coherent way.
look at all the articles since 2010 or so about Amazon and Tesla being bubbles. Or before that, articles in 2007-2010 about Facebook being Myspace. Or about Uber dying due to debt (this was in 2014-2016). These are the companies pundits write the most about ,and have been wrong. Yeah, many unicorns do fail or get acquired for sub-billion, but pundits seldom if ever write about them, except when they fail. The media wrote way more articles about Uber being a bubble than Fab, even though Fab died and Uber is doing well and worth >$40 billion .
The obvious difference is that none of those examples had the US government as an adversary. In such cases it's hard to evaluate any product or service based on its merits but rather based on which side of the political games they fall on. It is in the US's general best interest for Uber or Tesla to succeed, no so for TikTok, quite the opposite actually.
There's an often-shared image of the excitement of a technology looking like a V shape, with a valley of disappointment following a big media hype. I wonder if that's why the Bill Gates quote rings so true: "Most people overestimate what they can do in one year and underestimate what they can do in ten years"
Tesla will carry on for the next few years,until all the major manufacturers will get to the point,where making electric becomes a new norm. At that point Tesla may become no more than Dachia or Kia.
The narrative from Tesla bears continues to shift into the future as it outperforms their predictions. Wasn’t the company supposed to have been sidelined many times by now?
And when that doesn't happen, you'll come up with your next theory. The goal posts will keep moving until one day you'll run out of things to say and the company is a behemoth capturing a percentage of all car sales (not just electric).
That's been the dynamic with Tesla since the company was started.
Personally I couldn't care less whether they succeed or not. I'm not blind either and I'm fully aware how big a flame they put under the industry's ass and how everyone started working on similar projects. All that aside, I still think that they will be facing huge competition from other manufacturers once they are fully on board with electric models. Who knows, maybe Tesla will drive fast enough and will be no.1 manufacturer in 10 years time,I don't have crystal ball for that. It is, however, dangerous to ride on positive news only, disregarding any other opinion if it doesn't match yours.
I don't disagree with anything you said there! In fact I agree with your measured take. I only wanted to push back against this part from your original comment:
> At that point Tesla may become no more than Dachia or Kia.
The future is already here, and it requires these old car companies (Ford, GM, etc) to not only become electric car companies, but also become computer hardware and software companies. Many many manufacturers will fold in the coming years or be absorbed by larger conglomerates because they simply won't be able to compete on these vectors.
The advantages/efficiencies these old car companies have spent decades building are being rendered irrelevant. And that's the real problem for them. The risk isn't that they can't compete, the risk is that whatever they put out is irrelevant. Think iPhone v. Blackberry.
It's not just about making a new type of car. It's about building a new kind of company entirely.
The worst case scenario is Tesla gets acquired for a godly sum of money - not that it goes under or becomes the next Kia. Tesla's battery production capacity very well makes the company one of national strategic interest.
Please don't don't put facebook in the same category as Tesla, uber, shopify, etc. They generate an enormous amount of free cash flow. Without AWS even Amazon isn't generating much free cash flow.
It’s been reported Facebook has been offering exclusivity contracts to some of TikTok’s most followed personalities for its new competitor, Reels. It reminds me of Microsoft’s streaming platform giving millions to Ninja and Shroud only to close it down months later.
TikTok has been very good at focusing on new content discovery first when you open the app, making you swipe left to see the people you follow second—this is the opposite of Instagram. If Facebook does manage to pull people like Charli D’Amelio and Addison Rae to Reels and makes them more prominent, it would really be interesting to see two different philosophies compete against each other.
I feel that new personalities would just take their places given TikTok's would just push different videos should some leave. Since the magic of TikTok is the "for you" page, if reels does not replicate well then it may not take away a significant share. While instagram stories hampered growth from snap, they've also seemed to have some failures ex. competing against twitch. There were some tournaments hosted on the fb gaming platform but it seems like many of them have returned to twitch.
Have there been any major Facebook flops? They seem to be very successful in acquiring (WhatsApp, Instagram) and diversifying (Facebook Messenger, Instagram Stories) the next social thing. They are no Yahoo or, on occasion, Microsoft.
Maybe not a major flop, but Facebook’s original TikTok competitor, Lasso, was shut down. They tried to go after the Musical.ly half of TikTok’s user base that likes dancing to music.
Facebook are smart. They are well aware of the changes in the social network sphere and the fact that pretty much every single platform at some point starts loosing customer base because they move on to the new ones. So as long as Facebook keeps buying the ones whilst pulling billions in progress, they are fine.
Facebook keeps putting this bizarre emphasis on stamping their brand on everything they come up with to keep their brandname relevant.
Sounds more like Facebook should restructure as a holding company and keep creating independent concepts to see what succeeds, but keeping the Facebook name is likely an ego-driven decision.
In my personal experience, Instagram ads are shockingly good (they often hit me with something that I actually want) and Tiktok ads shockingly bad (I've never seen one I didn't swipe through immediately).
Obviously Tiktok and their advertisers will be doing a lot of work on this, and they've only just begun, but I really wonder about the efficacy of the medium for ads. It seems like a much more difficult forum for that. Even youtube ads I've heard are often cheaper than fb/google ads, perhaps because the video format is so challenging for advertisers to get right (plus it's expensive to produce good creative).
It depends how you count a user interaction. YouTube ads are pay per view. A view is defined as someone watching the ad for 30 second or longer, at which point the advertiser gets billed for a view (around 10 cents or so). However, only a small % of these views lead to a click to the advertiser's website. So although the PPV is lower than contextual CPC, it is about the same when one compares actual traffic to the website.
Instagram ads are better but TikTok is way more entertaining to me. I almost always get a chuckle or even a laugh every time I use TikTok, last time I opened Instagram all I got was boring food pictures, pictures of dogs and a friend's family picture...
I agree completely – and I wonder if it's part of the problem. If an advertiser on TikTok doesn't entertain me, I'm swiping. Whereas on Instagram, I'm more willing to look at some pants or whatever for a second – it's not that much less interesting than the competition (baby pics).
Good point, haven't thought of that. I guess Instagram is still in trouble because of the loss of eyeballs to TikTok. I've seen a few famous TikTokers advertising products at the end of their video. Maybe they could require taking a cut there. I guess they'll figure something out, that's why they hired all those facebook executives.
I have noticed significant change in TikTok ads over the past year. A lot of the newer ones use TikTok-like format, using a popular meme to promote their product, and I find those quite a bit more effective, if only because they're not obvious to tell apart from normal content.
Apps are easy to install... and easy to uninstall. Where's Snapchat these days? What about Vine? What about tumblr?
These companies make apps to try to monetize a community, but communities are fickle and easy to scare off. If I were an investor, I'd value these apps for the computers in their offices and the code their developers write and that's it. Maybe $100mil if you get me on a good day. You can't value them for their reach, because it's not the company or the app that makes them valuable, it's the community.
They're making money until they aren't. OnlyFans is sweeping a large amount of adult models off of Snapchat. Everyone is doing disappearing content, stories, and photo filters. The only thing they have left are the contracts they signed with companies and creators when they were in their heyday.
I haven't seen or heard about anyone using snapchat in the last year. It used to be the location for all my family's chat. They definitely aren't experiencing explosive growth anymore.
As someone in their mid-twenties, I can confirm. Since a lot of users don't have iPhone's/iMessage, and/or just don't use Facebook/Messenger that much, it's become a go-to messaging platform for those that don't seek out the more dedicated ones like Whatsapp, at least in my non-technical circles. I'm in several group chats that all organically cultivated on Snapchat in the past couple years.
Besides that, they've built out their first-party content platform pretty well, which I assume is what's driving their advertising growth, and (anecdotally) is shared in-app relatively frequently, although I've recognized some reposting/reformatting of said video content from Youtube or other sources, e.g. WatchMojo.
Their operating loss was an astounding $596 million for the first two quarters of 2020. Barely an improvement over last year's $620m operating loss for the same period.
Somehow they managed to generate a $596m operating loss on $916m in sales. Truly remarkable performance. It's not easy to so poorly run a business that should be printing profits. Facebook generated nearly a billion dollars in operating profit at that sales scale. The least Snap could do is break even.
I definitely empathize with your position on this, and you're right that community is the valuable part, hence the focus around active users.
What makes TikTok unique beyond growing like wildfire: their monetization strategy will be easier (the social aspect leads to relevant advertising), and their community is more stable!
The stable community is driven in part by their algorithms, which replace Instagram and Facebook's idea of a feed of those you follow. It gives more power to TikTok, in that you won't notice if some members of the community leave, and they can continue showing you content you'll enjoy from millions of other users.
To run through the list of companies you mentioned:
(1) Snapchat has a solid userbase that's likely to stay with it, and they're worth over $30b. They aren't profitable, but they chose that path when they focused on Spectacles above monetization, and paid engineers more than Google. A $50b valuation wouldn't be unheard of if they had 2x time-on-app as TikTok does.
(2) Vine had hundreds of millions of active users when it was shut down by Twitter.
(3) Tumblr is unique; they cut their own head off when they started removing content. They were always a niche service, without the mainstream appeal and without the ability to target their users with relevant advertising.
> What makes TikTok unique beyond growing like wildfire: their monetization strategy will be easier (the social aspect leads to relevant advertising), and their community is more stable!
I think monetizing a community that did not start with the expectation of being monetized will be difficult. Reddit is dealing with this right now and it's degrading the site and the community and they still aren't profitable. Youtube has the same issue right now - many creators did not plan to have their channel monetized and are now being shutdown or delisted because their content is thought to be dangerous to the monetization efforts.
This is what I mean when I say that TikTok is "easy to uninstall". As soon as a creator feels burned by the monetization efforts, they press and hold and click Delete App and they are gone. There's no contract in place that says "if you quit you must give us 60 days notice or pay a penalty", there's no stickiness but the validation from the community.
Monetization puts the company in the middle of the validation the creator gets from the consumer. Creators detect this, feel like they are being cut off from their drug, and bail to find the next "dealer".
>The stable community is driven in part by their algorithms, which replace Instagram and Facebook's idea of a feed of those you follow. It gives more power to TikTok, in that you won't notice if some members of the community leave, and they can continue showing you content you'll enjoy from millions of other users.
The endurance of Facebook, Instagram, Youtube and Twitter is the precisely because of the connect/subscribe/follow model.
Algorithmic content from random creators is not a model for creating an enduring user base. Users will eventually get desensitised to it and leave. There's a limit to how many memes you can consume.
> Algorithmic content from random creators is not a model for creating an enduring user base. Users will eventually get desensitised to it and leave. There's a limit to how many memes you can consume.
Another thing about these users in this specific demographic always eventually do is they just grow out of it and leave for something else. Or perhaps what was 'hot' in 2020 is now 'not' in 2021.
They'll just flock to the next social network rocket ship until either it runs out of fuel or if the liftoff (momentum) is too slow. Which ever event happens, it's the beginning of the death of the social network's growth.
If the demographic is the 15-25 age range, they will leave as soon as they feel that their aunt and her dog has signed up, therefore making it "not cool" by definition
The provided examples don't compute well. Snapchat for instance is doing well, worth lots of billions. One doesnt have to be No 1 to be successful. And with TikTok it's not unlikely that they will actually overtake some of Facebook services in the next few years.
> algorithm does a fantastic job at quickly showing good content that matches your interests.
Well you really don't have to do a lot to have better content than Instagram.
I'm glad TikTok could prove that social network users including very young generation can produce better content. Otherwise, Facebook was going to brain damage half of the earth population with the type of culture they are promoting for profit. And everybody was going to blame generation for it instead of the world that we designed for them.
Good 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).
There’s no way they could generate similar revenue per user. Revenue per user depends on much advertisers are willing to pay and there are a couple of differences:
1) Targeting: Instagram has exceptional ad targeting because it utilizes facebook’s existing data which TikTok tool doesn’t have.
2) Online spending: In theory wealthier countries / demographics should have higher online spending. May also have correlations with gender, age, employment status, number of digital devices, delivery infrastructure, etc.
3) Advertiser relationships: the real customers have to want to put their stuff next to your content.
4) Political risk: if many countries ban it, it’ll lose access to a lot of high value markets.
Lastly, profitability doesn’t always come later particularly for high bandwidth applications. Personally I’ve been getting a higher number of ads from YouTube but they are exceptionally poorly targeted (I skip at-least 90%). I would expect google to have as much data as anyone. The only explanation I have is that it’s simply too expensive to produce video ads to have an efficient targeted ad market.
Projected 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.
Ofcourse Platform companies are overvalued. There is no real tech here just user content they are trying to monetize.
Infact I would go ahead and say real tech was under valued look at Sun Microsystems, A company that Developed its own Processor (Sparc) , Its own OS (Solaris) , Its own Database (Mysql) , Its own VM (Virtual Box) , Its own Language and Development Platform (Java), Its own Development IDE (Netbeans) every one of those products is real technology and a leader in its own category.
And yet the company was sold at 1 Billion USD, which seemed like short change.
How much is Facebook projecting each user to be worth? I’m trying to figure out how the $662B valuation makes sense. Would love some insight into this, are they factoring in the propensity of the marketing industry to spend to come up with that projection?
Yeah, I think it’s overvalued by several hundred billion, which is scary dangerous when you think about it. That’s a bubble that tech might not be ready to reconcile.
These 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.
You'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.
It'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.
On the other hand I think it’s good for governments to face the consequences of their actions. If the Chinese government wants to treat technology as a surveillance mechanism, they shouldn’t be surprised when other countries want to avoid Chinese apps. Similarly, after revelations that the US government was messing with American companies, we lost business in places like Europe.
It is unfortunate that there’s less diversity of competition, but the loss of trust happened for a reason.
The comparison doesn't seem proportional at all. American tech companies were not forced to sell their technology to European investors in order to avoid their apps being banned in Europe. They were just fined.
A recent example is the app was caught reading the user clipboard in iOS 14 beta but a lot of other apps were also caught red handed. The oft-cited national security risk about ByteDance providing user info to Chinese government is a bit overblown, when the NSA has been spying on its own citizens for years...
This article further shows the point I was trying to make: not saying tiktok is in the right here but the media focus on tiktok for the entire article and then tag on the full list of 32 apps towards the end of the article in bullet points.
What I also find interesting is that ByteDance is the only Chinese company to become "popular" in the West for a long time (Alibaba, Baidu, Tencent are all years old now), and I wonder how this moves affects them at home.
Stateside, I'm discouraged to see it's VC firms making bids (according to the article), as then it may become a play on how to flip this to Facebook as they are the only ones actually monetizing social media.
50B 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.
Tiktok is the way forward for social media IMO. The only thing I don’t like is how the demographics skew younger at the moment, but everything else feels like a true next-gen social experience. I’d put the valuation maybe at 100B.
> 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.
>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.
> 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
Forgive me for not being completely in the know, but everything I've seen about TikTok leads me to believe that it's primarily low effort content.
In five years, everyone will be complaining about how TikTok is boring and worthless, but The Next Over"valued" App is going to shake things up and award good content.
> 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.
>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.
That's not what my FYP looks like and I don't think most people would agree TikTok and IG content aesthetics are similar... but even scaring cows sounds more entertaining than a picture of an influencer on the beach.
Cow memes and beach photos of vapid nobodies. We truly do live in the future, and it's as amazing as we all hoped. And anyone saying there's a bubble doesn't understand the value of eyeballs. I mean influencers.
This 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...
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 ...
US want both TikTok staff and the algorithm to be verified by a US technical committee which includes the NSA. US threaten to put TikTok on entity list that would prevent it frm run on Android or OS phone if it doesn’t sell to a US company.
The implication is that for any Chinese app with a lot of users abroad, US will now demand the code and the models or they will kill the app.
Some Chinese tech leaders nows think China needs a tech Manhattan project to build its own IT stack from scratch. It will be hard but can be done if China really tries esp when forced to the wall by US.
Some people are pretty sure US will sabotage any Chinese attempt to go it alone. Many in China believed US intelligence agencies behind 2015 XcodeGhost malware attacks on China to test whether they could screw w China’s software “supply chain” also a warning to Chinese.
You joke, but when it comes to the US-China Cold War, Israel is practically Switzerland. Lots of economic alignment both ways, lots of investment both ways, lots of flights (pre-Covid) to each, geographically far outside of each other's regional geography.
That 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 ..
Yeah 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.
There are two questions about the CCP and spyware: is it technically possible and do they have the political will to do it?
I don't think the CCP is putting spyware into the iPhone because it's only barely technically possible and they don't have the will to risk it. Getting caught with your hand in the cookie jar there would be the end of their whole economic strategy.
Would the CCP put spyware into Tik Tok? It's trivially possible, and the will is absolutely there. I would be more surprised if it were somehow proved that they weren't interfering with Tik Tok on some level.
Would the CCP put spyware into 5G? AFAICT, it would be technically possible, and the payoff from it would be so huge that they might have the will for it, but it's a close thing. Hard to say definitively either way. I think the industrialized nations should make their own 5G, just so they're not shut out of a growth industry, but the spy thing is sort of a wild card that could be something or nothing.
What I've learned over the years is that the lines always get tapped. The just do. Whether it's the telegraph, the telephone, or fiberoptic cables under the sea. The lines get tapped if at all possible.
I don't believe for one second that the CCP doesn't leverage Chinese made networking gear for intelligence. They probably even leverage third party gear too. This stuff is all so insecure everyone is in everything anyway.
No 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.
Name 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")
SpaceX. 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.
There'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.
No one in their right mind would say that they're behind on tech or just a manufacturing giant.
The parent comment is merely stating that no Chinese app has enjoyed global success and that many of their apps are very janky with poor UI/UX (generalizing here of course).
Your 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?
It'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).
It’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.
If 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.
There 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.
As 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.
I feel like YT used to be better at recommending stuff to me. Now it just sends me more what I've already seen. It seems like it's falling into the "you just bought a lawnmower. do you want to buy 500 more lawnmowers???" recommendation engine trap.
I haven't installed TikTok, so I'll ask you instead.
If there's no follow model, how do I see stuff that I want to see? Say there's a particular guy I like, I want to see a bunch of his content. Do I have to like it and hope the algo gives me more?
The follow mode is secondary as others said. But aside from that it figures out what stuff you like by tracking things like time spent on videos and dozens of other micro creative analytics that I'm sure would piss off privacy advocates. The end result is a very fine tuned recommendations algorithm that's really adept on its task.
there's a follow model, it's just secondary. when you log into tiktok, the first page you see is called the For You Page, where content is pushed to you algorithmically. to see the content you actually subscribed to, you'd need to swipe left.
The newer platforms will need to offer something different or there's no point in moving and it will likely take some years perhaps 4-5 before that new thing becomes apparent, in the meantime TikTok will be the new hot thing.
The space will get stale, people move on, trends change. Snap generated 1.7B in revenue FY2019. People were hyping it up the same way years ago.
IG made 20B in 2019, but it's revenue strategy may not work for Tik Tok's demographic. I'd like to see them capitalize a little more before claiming they should be worth 300B.
I 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?
I 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?
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?
I'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?
Actually 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).
I 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.
Bytedance 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.
Intuitively, 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.
Putting 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.
If 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.
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.
Could it get to $200B? Maybe. Is it worth that today? Absolutely not – way too much risk.
Something better could come along from an existing or new competitor, the ad platform may not come together, interest could decline when lifestyles change, they could try a bold new idea that doesn't work out or make other mistakes, etc.
No, 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.
> Everyone young uses tiktok. It's much bigger than snap could have ever hoped.
Interestingly, you'd think that, but it's dead wrong. I'd say about a quarter of people actually use tick tock, compared to almost all using instagram or snap chat. There's a "subculture" of people that use it and are massively active, and most others don't use it at all. This strikes me as a massive impediment to tick tock's growth in America: it's entirely captured a specific group but has made essentially no inroads with any other.
> It's not a monopoly.
This is a straw-man; no one is saying it is. People are saying it's a national security risk.
> Virtually all of its "privacy violations" are the same violations done by Google, Facebook.
Well, I'm less sure of what tick tock does with data than either of those, so maybe better the devil you know? The concern is that at least at least FAANGs can be sued in a court of competent jurisdiction, whereas tick tock is based in an autocracy that is deeply opposed to the concept of freedom and means to make itself the foremost world power by any means necessary.
> Interestingly, you'd think that, but it's dead wrong. I'd say about a quarter of people actually use tick tock, compared to almost all using instagram or snap chat.
They said everybody young uses tiktok. While that's obviously an exaggeration it currently is the number 1 most downloaded app on iOS and Android by quite a long way.
It's only 300M behind the all time number of Instagram downloads on all platforms (1.8B vs 1.5B) and is growing at 4x the rate of Instagram.
I'm speaking as a very young person, there seems to be a small group (about a quarter) who uses tick tock avidly. This is borne out by the data I could find, which showed approximately 22% usage among young people: https://morningconsult.com/form/more-young-teens-use-tiktok-...
I'd rather have my data used by an "autocracy" on the other side of the ocean that can't reach me, then by a "democracy" that can get me and make mu life hell. If that foreign "autocracy" is an enemy of the "democracy", even better, since they are then less likely to ever share my data.
> 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
China has already been doing stuff like this for decades.
It is about time that the US started doing the same thing back, when it makes sense to do so.
I 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.
Look if you think it is justified for China to keep out foreign companies, fine.
But if that is your opinion then don't come crying to the rest of the world, when they do the same exact thing to Chinese corporations that China has been doing to others, for decades.
I don't have an opinion on whether or not it is justified. I just think that the statement I replied to, is a very weird one. One reason being the leap of logic.
And frankly I doubt the correctness of the statement altogether. There are a ton of American companies operating in China, much more than the number of banned ones. How many US companies does China really ban?
What all these comments about 'fairness' also don't mention is that under the WTO rules, developing nations (which China officially is) are allowed to take protectionist measures.
> There are a ton of American companies operating in China
There are huge restrictions by China in American corporations.
You should look this up, if you are unfamiliar.
It is well accepted that there are many more restrictions, in comparison to say if an American corporation wanted to enter the EU market or something.
This is common knowledge, and it is easy to look this stuff up.
> are allowed to take protectionist measures.
And America is allowed to retaliate against them.
China can do what they want, but if they come crying to everyone else when other countries retaliate, nobody should expect others to take such complaints seriously.
Nah there is a quite huge gap between Douyin (Chinese Tiktok) and Tiktok itself. I once out of curiosity browsed Douyin. Peculiarly, they are rather hostile with attempts to bring TikTok trends into their platform, and they showed their contempt quite clearly.
What 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.
What 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
They 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.
Huh? 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.
Fate 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.
It’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.
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.