The phenomenal and speedy rise of TikTok has made the short-video-sharing platform the latest and most-likely-to-succeed front-runner in the race to join tech's inner corporate circle.
Why it matters: TikTok's vast pool of users, fine-tuned content algorithm and accelerating cash machine have made it the upstart that most spooks Facebook, which started copycatting TikTok's format in 2020.
Yes, but: Tiktok's arrival as a competitive challenger to tech's incumbent giants comes with a colossal asterisk — it's owned by a private Chinese company, ByteDance.
There was a time when TikTok could look forward to a future as a spun-off, independent outfit with a lucrative IPO and an independent, publicly traded status from which to compete in the U.S. with Facebook, YouTube and other rivals.
- The Trump administration changed all that with a haphazard months-long campaign of pressure and executive orders that promised to ban the service unless it found an American owner.
- The company survived that threat. But the Biden era's many commercial confrontations between China and the U.S. haven't made life much easier for TikTok, which now faces relentless scrutiny from regulators and Capitol Hill along with a national security review.
- Critics say TikTok's U.S. customer data could be at risk since Chinese law requires China's companies to share information with the government. TikTok says it operates independently and protects U.S. data through an alliance with Oracle.
By the numbers: By all measures, TikTok’s momentum is unprecedented. Even though the company is private, an overwhelming amount of data from various analytics providers all point to the app‘s power.
- Users: TikTok surpassed 1 billion users in just over 5 years last year, achieving that milestone many years faster than Facebook, YouTube and Instagram.
- Downloads: TikTok was once again the most downloaded app globally last quarter, the eighth quarter in a row it’s held that position, per Sensor Tower, an apps analytics firm.
- Time spent: Time spent per day on TikTok by U.S. adults is expected to surpass YouTube this year, per eMarketer. On average, U.S. adults will use the app 45.8 minutes per day compared to 45.6 minutes per day on YouTube. TikTok surpassed Instagram in daily time spent by U.S. adults in 2019 and Facebook in 2020.
- Advertising: TikTok’s U.S. ad revenue is on pace to surpass YouTube’s by 2024, per eMarketer. Analysts forecast TikTok will net more than $11 billion in U.S. ad revenues that year.
- Influencer marketing: Dollars spent on sponsored influencer posts on TikTok are expected to overtake the amounts spent on Facebook this year and YouTube in 2024, although Instagram will still dominate in that area.
Be smart: Much of TikTok's success is being driven by a new subset of young internet users that became heavily engaged with the platform during the pandemic.
- The latest biannual survey on teen consumer habits from Piper Sandler found that TikTok, as of April, has surpassed Snapchat as the favorite social media platform for U.S. teens (on average age of 16.2 years), with Instagram in third place
Flashback: Long before TikTok's arrival on the scene, of course, Snapchat held the "most likely to replace Facebook" crown. But after a 2017 IPO Snap Inc. has foundered, with the company announcing 20% layoffs and other product trims on Wednesday.
