TikTok ban: ByteDance would rather shut app down than sell, insiders say
- The app’s algorithms are deemed too important to the Chinese parent company, making a sale to an American buyer highly unlikely
- While highly popular, the video-sharing app accounts for only a small share of ByteDance’s total revenue and daily active users
TikTok owner ByteDance would prefer shutting down its loss-making app rather than sell it if the Chinese company exhausts all legal options to fight legislation to ban the platform from app stores in the US, four sources said.
The algorithms TikTok relies on for its operations are deemed core to ByteDance overall operations, which would make a sale of the app with algorithms highly unlikely, said the sources close to the parent.
TikTok accounts for a small share of ByteDance’s total revenues and daily active users, so the parent would rather have the app shut down in the US in a worst-case scenario than sell it to a potential American buyer, they said.
A shutdown would have limited impact on ByteDance’s business while the company would not have to give up its core algorithm, said the sources, who declined to be named as they were not authorised to speak to the media. ByteDance declined to comment.
It said late on Thursday in a statement posted on Toutiao, a media platform it owns, that it had no plan to sell TikTok, in response to an article by The Information saying ByteDance is exploring scenarios for selling TikTok’s US business without the algorithm that recommends videos to TikTok users.