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Comment by simlevesque | Hacker News Reader

It never was about ByteDance. It's the Chinese government who will decide.

From their point of view, the right strategic move is to shut it down. Even if every other country bans the app it doesn't impact them much. Also they hate doing things that make then look weak.

If they sell, they lose their influence. If they shut down, same thing.

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Western companies have largely taken the same approach and exited markets that banned them rather than sell. Whether it's Google, YouTube, X, Instagram, or Facebook, they didn't sell either.

But from a practical standpoint how do you sell 'a branch' of a software-based company?

Do you sell/license the software? Do you charge this new company for API access to the 'old' services?

I've had a really hard time trying to imagine how this could play out in fair agreement. I think the only real option is to exit the market.

> It never was about ByteDance. It's the Chinese government who will decide.

This makes for a pithy statement, but is it actually true? Obviously the Chinese government has a lot of influence on Chinese companies, but do they actually dictate strategic direction like this?

Yes. They own the company. Any medium/large company in China has a government representative embedded in the exec team.

> They own the company.

> Any medium/large company in China has a government representative embedded in the exec team.

These two aren't the same thing. Obviously if you go directly against the Chinese government you're liable to disappear for a while, like Jack Ma. I just don't think the Chinese government gives that much of a shit about a social media company. Despite all the hysteria about TikTok being uniquely corrosive to society you can see most of the same content and trends on homegrown competitors like Instagram.

I thought all businesses in China operate at the pleasure of the government?

Most recent attempt I can think of bucking that trend is Ant group and Jack Ma, who presumably still is in a room somewhere and not a dark hole in the ground.

They really, really do. It’s communism 101.

ByteDance has a number of big US investors. A sale or divestiture of Chinese ownership would be good for these investors. From a purely financial view, selling is the right move. The only reason not to sell is because a player who doesn't care about money is putting the brakes on.

I also think if they pull out of the US, it's not improbable for the EU to also push TikTok to make changes.

On this specific issue, very probable. China has a law that restricts the export of algorithm: https://asia.nikkei.com/Politics/International-relations/US-...

It's completely sensible - Why would you just hand over your crown jewel to a competitor?

(At the same time, it doesn't seem like China really cares for its tech industry, given how many times they've sabotaged it. It is possible they don't care about what happens with TikTok.)

It is not handing over. It is selling for a price. I think there IS a price that ByteDance would sell.

its not that they dont care, they care a lot. chinese way of thinking is if you know how its made/how it works you can always make more, make another. no company is above the govt, china.

I doubt it, their core competitive advantage is their algorithms which they would have to disclose in a sale.

So they wouldn’t be selling the US subsidiary, they’d be selling the entire golden goose.

Is disclosing the algorithm a mandatory condition of the sale? If I were them I'd not give away the algorithm. I'd sell the name, branding, userbase, and let them lease the servers until they could host it in their own datacenter -- at which point they'd have access to most of the code, but not the algorithm (if the algorithm is of special value).

Not really. ByteDance is based in Singapore. They can sell it to whoever they like, but most of their operations are based in China and even if they could be sold, who in their right mind would buy that? Because it doesn’t solve the real issue - 100,000 employees in China is a dead end for any acquirer.

> ByteDance is based in Singapore.

Is it? Wikipedia seems to disagree:

> ByteDance Ltd. is a Chinese internet technology company headquartered in Haidian, Beijing and incorporated in the Cayman Islands.

The only mention of Singapore is in reference to launching a music service there.

Do you have information you can reference that isn't available in the Wikipedia article?

https://en.wikipedia.org/wiki/ByteDance

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