Four sources have revealed that ByteDance, the owner of TikTok, would opt to close down the app rather than sell it if it exhausts all legal avenues to contest legislation banning the platform from US app stores. According to these sources familiar with ByteDance’s thinking, the algorithms crucial to TikTok’s functioning are considered integral to ByteDance’s broader operations, making the sale of the app along with its algorithms highly improbable.
Although TikTok contributes only a small portion of ByteDance’s total revenues and daily active users, the parent company would prefer shutting down the app in the US rather than selling it to an American buyer in a worst-case scenario.
The sources, speaking on condition of anonymity as they were not authorized to speak to the media, stated that a shutdown would have minimal impact on ByteDance’s business, allowing it to retain its core algorithm.
ByteDance declined to comment on the matter when approached by Reuters, but it released a statement on Toutiao, its media platform, denying any plans to sell TikTok.
TikTok’s CEO, Shou Zi Chew, recently expressed confidence that the company would successfully challenge legislation aimed at banning its app in the US, which was signed into law by President Joe Biden. This legislation stems from concerns among US lawmakers about potential data access by China or surveillance through the app.
Although Biden’s signing sets a deadline of January 19 for a sale, with a possible three-month extension, ByteDance’s financial performance remains undisclosed publicly. However, it is known that the majority of its revenue is generated in China, primarily through apps like Douyin, the Chinese counterpart of TikTok.
While the US accounted for approximately 25% of TikTok’s revenue last year, according to a separate source, ByteDance’s financial details remain closely guarded.
