TikTok owner chases Meta with $120bn sales

TikTok’s parent company made $120 billion in annual sales last year, snapping at the heels of Meta Platforms, the owner of Facebook, which made $135 billion.

The booming revenues at ByteDance, up from $80 billion last year, show how the social app is booming in popularity around the world, although it is not thought to be profitable.

According to the Financial Times, ByteDance’s American business made up more than 10 per cent of the total, a record $16 billion of sales. TikTok would not comment on the figure. ByteDance is a privately owned company and so its financial information is not made public.

TikTok has long been viewed as controversial by western governments because of its Chinese founders and its enormous presence in the country. With its addictive algorithm and mass appeal, there are fears about the misuse of people’s data, as well as the threat of undue influence over users by the Chinese government.

As a result, a ban looms over the Chinese social media business in the United States. On Wednesday, the House of Representatives voted through a bill that would force ByteDance to sell TikTok to a new owner within six months or face being wiped off American app stores, such as Apple and Google. The bill has to go to the Senate for another vote and then it must be signed off by President Biden in order to be made into law.

Donald Trump tried to ban TikTok in 2020 when he was president, but the move was overturned by the courts. It is banned in India.

“TikTok is too large and valuable for the platform not to be sold to one of many potential buyers,” analysts at Jefferies said, noting that there was “a less than 10 per cent chance” that the service would be totally shut down in America. Dan Ives, an analyst at Wedbush Securities, put the likelihood higher, at 25 per cent.

TikTok has an estimated 170 million users in the US and about 150 million throughout Europe. The latest annual report from Meta, which also owns Instagram, Threads and WhatsApp, said it had 2.11 billion daily active users. Snap reported in its most recent earnings statement that it had 414 million daily active users and had made $4.6 billion in annual revenue, almost flat on the year before.

Those who have expressed an interest in taking over the app include Steve Mnuchin, the former US Treasury secretary, who said he was pulling together a group of investors for a bid.

Another prominent figure said to be looking at the business is Bobby Kotick, the founder of Activision Blizzard, the computer games business behind Call of Duty. He has stepped back from his role at Activision since its acquisition by Microsoft. During previous discussions about a ban in 2020, Microsoft also expressed an interest.

TikTok could be worth between $35 billion and $40 billion, according to Bloomberg Intelligence.

ByteDance maintains that while the company has Chinese founders, it is not a Chinese business, with 60 per cent owned by investors such as The Carlyle Group and General Atlantic, 20 per cent by its co-founder and 20 per cent by its workforce. Three out of five of its board members are American.

It says that it does not hold data in China, nor does it share it with Beijing and that it is spending €12 billion on “Project Clover” to protect European and British users’ data, with a similar “Project Texas” in the US. Since 2022, Oracle, the American technology company, has held the data of US users on its servers.