The race is on to purchase the ever-popular short-form video app, TikTok, as potential buyers emerge in a possibly futile pursuit given imminent U.S regulations potentially leading to a U.S ban. Out of the gate comes Frank McCourt, a real estate tycoon, ready to throw his hat in the ring with an investment team in tow. However, the question remains, for an app potentially valued at a whopping $100 billion, what would a new owner mean for TikTok?
Should McCourt win the day, the platform’s user experience is unlikely to change significantly, despite some considerable hurdles. One potential challenge could be the Chinese government barring the purchase of TikTok’s core algorithm, vital to content curation in the app. Yet, McCourt remains undeterred, focusing instead on transforming the app’s current design paradigm.
McCourt’s previous business ventures may hint at his plans for TikTok. Having invested a hefty $500 million into a social media and technology initiative, Project Liberty, McCourt has shown a keen desire to dilute the influence of Silicon Valley’s tech giants. Project Liberty’s primary objective stands as the creation and implementation of a blockchain-based protocol, offering individuals greater control over their online data. One wonders if such a protocol could indeed transform the TikTok experience?
Unsurprisingly, McCourt’s plans have attracted vocal support, notably from influential NYU professor Jonathan Haidt, who advocates the protection of children from potential harm caused by smartphones and social media.
TikTok, however, has yet to express any desire to sell its U.S operations and continues to battle the new law threatening to either force divestiture or impose a ban in the court. Yet, this has done nothing to weaken the resolve of other potential investors. Notably among these is former Treasury secretary Steven Mnuchin and ex-Activision CEO Bobby Kotick, with Shark Tank judge Kevin O’Leary also expressing possibly lucrative intent towards the app.
The acquisition of TikTok would indeed be a financial behemoth, requiring a significant monetary commitment from the potential buyers, combined with convincing the app’s current stakeholders that selling is not only commercially viable but also technologically and legally feasible. Unprecedented Chinese regulations introduced post-2020 to limit the export of particular technologies, including “personal interactive data algorithms,” presents another hurdle to any aspirants for TikTok’s future.
Furthermore, TikTok considers a potential separation from ByteDance as a breach of the First Amendment. It also argues that a divorce could isolate the American TikTok community from the rest of the app’s global users. Additionally, the prospect of new team members sifting through extensive source code to operate the revamped platform effectively could take several years.
Thus, while the race to secure the future of TikTok is heating up, the road to a potential purchase is fraught with a raft of financial, legal, and technological challenges. And, with the added consideration of a Chinese government reluctant to allow the sale of TikTok’s core algorithm, the question arises – in the pursuit to own TikTok, can there truly be a winner?
