Photo Credit: Ivan Radic / CC by 2.0
With the latest TikTok ban in the US just two weeks away, will Chinese parent company ByteDance agree to any sort of arrangement?
The battle for a US-based TikTok deal seems to be largely powered by US investors attempting to prod a deal along. Chinese parent company ByteDance has repeatedly vowed that no deal is on the table, and China is not interested in relinquishing any ownership in its precious algorithms.
Existing backers of ByteDance are rapidly seeking to acquire additional stakes in a US TikTok business. But ByteDance seeks to retain a stake in the platform’s US operations, which would negate the purpose for a US spinoff in the first place.
TikTok faces an April 5 deadline for a federal law that will ban the app in the United States (again) unless its Chinese ownership agrees to sell the US arm to US-based, non-Chinese entities. That legislation was introduced by Congress over national security concerns, and initially came into effect in January. But the platform returned almost as quickly as it was shut down, as Trump signed an executive order extending the deadline by 75 days.
ByteDance strongly favors the proposed deal structure centered on software giant Oracle, according to reports. But whether the company (and the Chinese government) will agree to release meaningful control on the platform to allow it to remain operational in the US still remains uncertain.
Meanwhile, Beijing’s criticism of Hong Kong conglomerate CK Hutchison’s decision to sell its port business near the Panama Canal to investment company BlackRock illustrates the CCP government’s hesitancy to cut any sort of deal with the US. According to China’s Hong Kong and Macau Affairs Office, CK Hutchison’s sale was a “betrayal of China” that neglects its national interests.
Similarly, advertisers are torn whether to cut their losses or double down as TikTok’s future in the United States remains shaky. Already, enough have walked away to plummet ad prices for those who have chosen to stay. TikTok asserts that brands have not abandoned the platform — but the decline in ads is tough to ignore.
“Support has been coming,” said Adolfo Fernandez, global head of product strategy and operations, commerce, at TikTok. “We have almost 100% of the brands previously on TikTok in the US back online.”
But even if that’s true, the demand for ad space on TikTok has declined, perhaps as its competitors ramp up efforts to attract users and creators who want to jump ship ahead of a potential platform ban.
“TikTok’s future remains a question mark for some clients, with concerns about a potential ban causing hesitancy to test new ideas,” said Deanna Mulkeen, head of media investment at agency Wpromote.
Similarly, indie agecny Hanson Dodge recommended its clients pause spending on TikTok prior to the January ban deadline. Clients who took that advice have yet to return to the platform. “Overall, we’re seeing less spend with TikTok than last year,” said executive media director Jeremy Whitt.
Whether TikTok will admit it or not, many of those brands have shifted their focus on Meta’s Reels, YouTube Shorts, Snap Commercials, and even Reddit Category Takeovers. Agencies like Wpromote confirm they are “exploring where we can redirect client dollars to take advantage of similar audiences, communities, and creative ad products across the social ecosystem.”
TikTok’s competitors are clearly not waiting for the fallout when — or if — the platform does see a US ban. Instead, they’re putting their ad dollars to good use on social platforms that don’t run the risk of vanishing in two weeks’ time.
