Implications of the banning of TikTok in the US

Source: © Goods Fox Goods Fox Tomorrow, Friday, 10 January, representatives of TikTok's parent company ByteDance will plead to the US Supreme Court to halt the decision of a looming ban later this month

If the ban is enforced, Reuters reports that new users will not be able to download TikTok from app stores and existing users will not be able to update the app, because the law prohibits any entity from facilitating the download or maintenance of the TikTok application.

So while US users of TikTok will still be able to use the app (because it is already downloaded on their phones), without software and security updates, the app will become unusable over time.

Already in December US lawmakers had informed Apple and Alphabet’s Google, to be ready to remove the platform from their stores on 19 January.

TikTok to Lemon8

Despite the ban applying to ByteDance and all its platforms, as the ban looms Lemon8, TikTok's less-known sister app, has been sponsoring posts on TikTok to push users to migrate to the app.

Today in Digital Marketing says reports suggest ByteDance could be betting that regulators and app stores are so focused on TikTok that they may overlook its other apps.

ByteDance has also released an app called Melolo featuring short dramas, TV and movies on Google’s app store quietly in November.

TikTok’s US GM, Sameer Singh resigns at key time, raises advertising stability concerns

Danette Breitenbach  6 Jan 2025

TikTok employees

Recently TikTok's North American head of ad sales Sammer Singh left the platform.

Now, in an exclusive AdWeek reports the loss of another top ad executive, Jack Bamberger, general manager of agency business.

It says he left the company on 3 January, quoting a person with direct knowledge, and confirmed by a second source from an advertising agency.

TikTok employs 7,000 people in the US, and while pessimism spread among staffers who worry about layoffs, there has also been confusion as the platform has continued to make job offers for new roles.

Reuters quotes one user who received a job offer from ByteDance in San Jose, California, starting in February.

“Others commented on the post, counselling the user to accept the offer and use it as leverage in other interviews. "I signed the offer and will wait and watch how the situation unfolds," the user said in the post."

Advertisers

TokTok has an expected ad revenue of $12.3bn in 2024 in the US*.

Reuters says that advertisers say TikTok’s devoted user base means some brands will try to advertise beyond the banning date.

“Some advertisers may continue spending beyond 19 January on TikTok and reevaluate if the app sees declining usage or performance, said Jason Lee, executive vice president of brand safety at media agency Horizon Media in the Reuters article.

It also quotes Craig Atkinson, CEO of digital marketing agency Code3, saying, “The ongoing assumption is the app might not be updatable, but you’ll see a groundswell of usage.”

He adds that TikTok’s e-commerce feature TikTok Shop, which lets users purchase products directly from videos, has no direct competitor that advertisers can easily switch to.

Atkinson said, adding that his agency has signed new contracts with clients to build TikTok Shop campaigns even as of late December.

Trump's U-turn on the banning of TikTok

Danette Breitenbach  2 Jan 2025

Potential buyers?

Despite TikTok repeatedly stating it cannot be sold from ByteDance, there are buyers interested.

Forbes reports that Shark Tank” star and investor Kevin O’Leary has plans to purchase TikTok.

It says, “O’Leary told Fox News’ Martha MacCallum he plans to buy TikTok and that he will need President-elect Donald Trump’s help to do so, though it is unclear whether ByteDance is considering the offer (O’Leary is part of The People's Bid for TikTok, a project led by billionaire investor Frank McCourt that seeks to buy TikTok and rebuild the platform in a way that prioritises Americans’ privacy).”

Reuters quotes billionaire businessman Frank McCourt, a former owner of the Los Angeles Dodgers baseball team as saying that he has secured $20bn in verbal commitments from a consortium of investors to bid for TikTok.

“McCourt has not yet spoken with ByteDance, but said he believes the Supreme Court will uphold the law requiring TikTok’s divestment, after which the parent company would be more open to sale discussions,” says Reuters.

McCourt's business plan for TikTok includes migrating the app onto open-source technology and earning revenue through e-commerce and licensing data for AI training says Reuters.

* according to research firm Emarketer