The wobble dance of ByteDance

How do you spend your free time? 

Probably by hanging out with your friends virtually or binge-watching your favorite TV shows. Some must have spent their time on TikTok, Instagram, and YouTube of course. 

Have you noticed the wobble dance of ByteDance? Or. Have you seen a dance video on TikTok? We are sure that you must have seen someone making meme-worthy dance videos on TikTok even though you did not use it. But that’s the feature of this social media platform. But what I am talking about, is the political dance of TikTok (ByteDance). 

TikTok is facing allegations of security concerns from countries. This news made into the top headlines of many media channels. Before we put the opinion on what is happening, here is a bit about what TikTok actually is and why did it gain so much popularity in many countries. 

TikTok – the Phenomena

What’s more? It also allows users to share memes but, with a slight variation. So, you got the point that it can mitigate the boredom of some users. Let’s put it this way. You probably would not like to watch long videos. Think about all those WhatsApp forwards and those Facebook feed videos. You might not like a long one. Reducing them to a limit of 15 seconds is a behavioral assumption which worked well for TikTok. Due to these features, many joined and gained followers by posting content. At one point, it posed a threat to YouTube as well.

Isn’t this data in the picture signifying something? The important aspect to look at this data is how ByteDance has leveraged TikTok into the world of social media platforms. 

TikTok earns money from in-app purchases and advertisements on its platform. It’s parent company ByteDance has been recognized as one of the most valuable companies in the world. This surely depicts the success of this company. 

What is the conundrum?

You must have seen news around the uncertainly of TikTok and it all started from India, where the app is banned along with other 58 apps. The reason was the security threat from Chinese companies. As soon as India banned the apps, the US responded in the same tone, which said that they will examine the Chinese company. Well, this was just an opportunity that the US saw to ban Chinese companies to exacerbate the trade war. 

The US-China trade war needs no introduction as it has grabbed a lot of attention and is one of the most prevalent reasons behind the economic fall. In Trump administration, China has become the target point and now TikTok is facing the issue because of national security concerns. 

Let me get into a bit of details. All the social media companies have the power to track user behaviour and it goes like this: when you download the app, you give some sort of permission to the app. As you permit it to access pieces of information, they will track your shopping behaviour, browsing habits, and many more. 

But this level of surveillance is pretty much standard for the industry. It’s the game of algorithms and the probable reason would be related to designing the algorithm that TikTok uses. Unlike Facebook, its algorithm is designed to select and push videos, not simply to share content among networks of friends. To put it in simple terms, TikTok has more power over your heart and mind and if it chooses to exercise that influence for political purpose, it could conceivably turn an election. 

Given the growth prospect of the company, TikTok’s parent company is recently valued at $100B, which is quite a big milestone for the company. Recent news suggested that Microsoft is believed to have been involved in the deal to buy not only the US business of TikTok but also to buy the global business. This sounds interesting! Microsoft wants to enter into social media. Access to data is another important aspect of the deal. This deal looks complicated as much thought needs to be given to buying as a whole or a part of it. 

Whatever the case might be, it’s the wobble dance of ByteDance due to which it might lose one leg of its business. It would be interesting to see how China, and the company would retaliate on this front. 

This article has been authored by Praveen Gupta.

Praveen Gupta is 2nd year Finance student at SIBM Bengaluru. He did engineering just to end up in MBA. Pondering much over a thought again and again messed up his mind, and he decided to write on the current global market which has become a habit. He loves to deliberately give knowledge to anyone through his words. His aim to become a global financial analyst.

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