$75B value and it still faces the most basic question. Makes me feel I don't understand business at all.
Also its main app seems to be musically. I have only heard of it but it seems a little to an app like Dubsmash. Did dubsmash ever make any money? What is the business model for such apps?
Business journalism really does a disservice when it pushes the "they have no revenue model" angle for these massively scaling traffic aggregators. It was a bit interesting when this was written of Yahoo, I guess, since we didn't have proof yet that online advertising was a viable business model.
In any case, the playbook is very well understood. Build a loyal audience numbering minimally in the hundreds of millions (Small audience pubs only achieve success with subscription-based models. Mid-sized audience aggregators may not have a viable business model at all). Demonstrate that the cost of building said audience is either free or pennies per user (e.g. unpaid viral audience growth). Make several dollars to tens of dollars per user per year by running advertisements to said audience. The more relevant or (lately) emotionally compelling the advertisements the more you'll earn per year per user.
Of those components, building an enormous audience is the hardest part, which is why every company that has followed this model, from google to snapchat, has focused on that long before building a corresponding revenue stream.
We've seen this model a dozen times and it's understood well enough that financiers are able to approximate the value of Bytedance future revenue streams rather confidently.
Twitter is worth 20B. Facebook is worth just five times this and also has Instagram and Whatsapp. Is this worth as much as Instagram which has a huge and wealthy audience?
And due to various reasons, some from censorship, some from the medium itself and how the company chooses to operates on it, Tik Tok is mainly free of political contents, which makes it less toxic.
Also Tik Tok breaks out in other major Asian market as well, like Japan/S Korea/Taiwan, etc. Those markets are very lucrative.
South Korea[No.4]: https://www.similarweb.com/apps/top/google/store-rank/kr/all...
Japan[No.8]: https://www.similarweb.com/apps/top/apple/store-rank/jp/all/...
Taiwan[No.2]: https://www.similarweb.com/apps/top/google/store-rank/tw/all...
In fact, if you count China, it is most downloaded iOS apps in the WORLD, for the first quarter of 2018:
https://qz.com/1272285/bytedances-music-video-app-douyin-tik...
And Bytedance has other mega apps other than Tik Tok, like Toutiao, which is its own money maker.
- Toutiao, the content farm (think Buzzfeed++), a pivot from the original news aggregator model. It has 120M DAU as of last October, per YC's report [1].
- Douyin, or Tik Tok, the short video platform, a pivot from originally a copycat of Musical.ly (ironically). It has 150M DAU [2].
- Dailyhunt, Toutiao for the India market.
- Musical.ly, an acquisition.
I have a strong disdain for the company, because the content is almost completely garbage, rumors, and click-baits, and it is dangerously addictive.
[1] https://blog.ycombinator.com/the-hidden-forces-behind-toutia...
[2] https://walkthechat.com/douyin-became-chinas-top-short-video...
This is the part I feel quite sad for them.
Yes, they break out the iron grips of Tencent, but look at what they did.
It paints a painfully-clear image of China's Internet market: Race to bottom, not only in market poly, but also in the actual content.
[0] https://www.youtube.com/watch?v=5PmphkNDosg (NSFW language)
It's worth $800 million because someone was willing to buy it for $800 million. Why is anything worth anything? Because someone is willing to pay for it.
> isn't ads to kids illegal in most countries?
What? Then how does nickelodean, toys stores, kids clothes store, etc exist? I can assure you that ads to kids are most definitely legal in most countries. We have back-to-school sales and of course we have christmas.
> And even if it's legal, how moral is it?
What's immoral about it? Targetting adult specific ( cigarettes, alcohol ) to kids shouldn't be allowed, but what's immoral about targeting age specific products to kids?
You sound like people saying kids shouldn't be taught about sex education, learn about violent news, etc. Kids and everyone should be taught about ads and adults should help kids deal with ads because ads are a part of life and they are going to have to deal with it eventually. Rather than ads themselves, I think the lack of educating kids about ads is the problem. But lots of backwards controlling parents want to keep children uninformed and naive and ill prepared for real life.
1: https://www.telegraph.co.uk/education/educationnews/9984366/...
2: https://parenting.blogs.nytimes.com/2012/07/13/ban-on-advert...
Obviously I meant that I can't see how they'd get $800 million of value from their purchase. Thank you for your lesson in market value though.
> What's immoral about it?
Children aren't equipped to separate fiction from reality, so they aren't as critical about what they're told as adults are. Plus they rarely have much money of their own, so advertisers use the children's "pester power" [0] to get the parents to buy stuff.
> You sound like people saying kids shouldn't be taught about sex education, learn about violent news, etc.
No I don't. That's learning about real life issues to equip you for the future. Ads are people trying to take advantage of you for their own profit. Don't compare commercials with information.
I'm French, but my account is set as english / US.
http://bytedance.com/products/
From what it seems, its trying to dominate the new media space in China and Asia through consolidation and acquisitions.
Tik Tok is seriously addictive and the ultimate time killer. Too much so I think the Chinese government is pushing some anti-addiction measure to this platform, as what they did for the online gaming market.
They run ads between the short videos, I would imagine that ad space is very valuable to some Chinese companies. I've never used Musical.ly however I imagine its similar just rebranded for an American market.
You understand business, just not the shell-game that's grown up around it.