The Chinese billionaire behind teen phenomenon TikTok is a 36-year-old tech guru whose eye for youth trends and pioneering use of AI has blasted the app to global success — while working hand-in-glove with censors to control content within China. Zhang Yiming’s Beijing-based startup ByteDance owns TikTok, whose kaleidoscopic feeds of 15 to 60-second clips feature everything from hair-dye tutorials to dance routines and jokes about daily life.
Since launching in 2017, TikTok has been downloaded more than 1.5 billion times, according to US-based research agency Sensor Tower. It has huge followings in India, the US, Indonesia and elsewhere.
But its rise has raised security fears and last month two senior US senators called for a government review of the app, saying it could leave users vulnerable to spying by Beijing.
ByteDance, which Zhang founded in 2012, prides itself on using artificial intelligence to personalise newsfeeds according to users’ interests.
The company has had “huge and immediate success” because it pays close attention to its young users, said Bo Ji, assistant dean for the Cheung Kong Graduate School of Business.
“The new generation… want to share their real feelings, whether good or bad. They are more direct and expressive,” he said.
TikTok is ByteDance’s most popular overseas app, while its other products in China and abroad include news aggregators and productivity tools.
Together they have taken Zhang — a programmer before he became a businessman — to the highest echelons of China’s billionaire club.
In 2019, he was listed in the top 20 of the Hurun China Rich List with $13.5 billion in wealth, surpassing more established tech tycoons, such as the founder of search giant Baidu.
Zhang’s fortunes were given a huge boost with ByteDance’s 2017 acquisition of lip-syncing video app Musical.ly — later merged with TikTok — in a deal reportedly worth as much as $1 billion.
“Mr Zhang is unusual Chinese entrepreneur,” said Bo.
“He built something for the world; he understands the young people and their psychology.”
Liu Xingliang, dean of the DCCI research centre, told AFP that Zhang represents a new wave of entrepreneurs and a different breed to China’s most famous tycoon, Alibaba’s Jack Ma.
He is “more like a young Pony Ma,” Liu said, comparing Zhang to the 48-year-old co-founder of Chinese internet giant Tencent.
This is because Zhang “used to be a programmer, paid more attention to products, and knew technology well”, he said.
ByteDance also operates a Chinese version of TikTok, called Douyin. It is the top short video app in China, with over 400 million monthly active users, according to iResearch.
Douyin, launched in 2016, attracted users by bringing on board top celebrities like Chinese actor and singer Kris Wu.
But ByteDance’s first flagship product was the immensely popular Chinese news aggregation app Jinri Toutiao, or “today’s headlines”.
“(Toutiao) has changed Chinese reading habits… they will know what you like to watch, and you will have the things you like to see recommended to you,’ said Liu.
Aside from TikTok, ByteDance also runs TopBuzz in the US, an English-language news aggregation app that the company was reportedly trying to sell in September.
In 2016 it became a controlling stakeholder of BaBe, an Indonesian news app with more than 30 million downloads since its launch in October 2013.
Productivity app and Slack-competitor Lark is ByteDance’s latest product, which features cloud storage, chat and calendar functions.
And according to recent reports, the company is also planning to launch its own music streaming service to compete with subscription models like Spotify and Apple.
In mainland China ByteDance employs thousands of censors to scrub out inappropriate content in its domestic platforms — at a significant cost to the company.
It reportedly hired 2,000 censors in January 2018 after Beijing accused its news aggregation app of “spreading pornographic and vulgar information”.
It then promised to increase its internal censorship staff to 10,000 after being temporarily banned by the government in a widening content crackdown.
Censorship is common in China where the internet is tightly controlled.
But going global has brought its own censorship challenges for TikTok, which is blocked in Bangladesh and was briefly banned by an Indian court over claims it was promoting pornography among children.
It was also hit with an enormous fine in the US for illegally collecting information from children.
One TikTok video that went viral this week contained criticism — hidden within a clip that appeared to offer tips on eyelash curling — of China’s mass detention of Muslims in its Xinjiang region.
A Twitter account apparently belonging to the same teenager who posted the video said she had been suspended “for trying to spread awareness” — a claim disputed by the app. The video was readily available on TikTok Wednesday.
TikTok has sought to distance itself from China, saying in October that it is “not influenced by any foreign government, including the Chinese government.”
But US senators have warned in a letter that TikTok’s owner ByteDance could be forced to share user information with Chinese intelligence, and could also be used to influence upcoming US elections.
TikTok Sale: Algorithm Question Said to Complicate Deal
Sale talks for TikTok’s US operations have been complicated by the key question of whether the app’s core algorithms can be included as part of a deal, according to a report in The Wall Street Journal that cited unidentified people familiar with the matter.
Those algorithms decide what videos users see without first requiring them to follow other users or specify their preferences. The Journal report stated the algorithms were considered part of the deal negotiations up until Friday.
That’s when the Chinese government introduced export restrictions on artificial intelligence technology that appear to cover content-recommendation algorithms such as the one powering TikTok. The move followed President Donald Trump’s effort to force a sale of TikTok’s US operations by September 20.
Those export restrictions mean that TikTok’s Chinese owner, ByteDance, would have to obtain a license to export any restricted technologies to a foreign company. The question is whether its algorithms would need Chinese government approval for transfer, and if so, whether Beijing would sign off.
The Journal report said both the prospective buyers and the seller, ByteDance, are trying to figure that out. Prospective buyers for US TikTok assets include a Microsoft-Walmart team-up and, reportedly, Oracle.
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TikTok CEO Kevin Mayer Quits After Three Months, Just as Firm Challenges US Ban
TikTok CEO Kevin Mayer has left the Chinese-owned video app firm just three months since joining, and only days since the company sued the administration of US President Donald Trump over an executive order effectively banning it in the United States.
He will be replaced by US General Manager Vanessa Pappas on an interim basis, TikTok said in a statement.
The resignation comes at a tricky time for super-fast growing TikTok as it tries to persuade both the United States and India that it is not a security threat, while at the same time holding discussions with prospective buyers following a second US order demanding the sale of its US operations.
In another development, former TikTok India manager Raj Mishra has been appointed by Triller as Country Manager and Head of Operations for the country. Mishra was the very first employee to be hired at TikTok India. In his new role at Triller, he will be leading and furthering the development of video-sharing app’s products, operations, and overall business goals.
“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in an letter to employees.
“Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.”
ByteDance founder and CEO Zhang Yiming said in a separate letter reviewed by Reuters that the company was “moving quickly to find resolutions to the issues that we face globally, particularly in the US and India”.
He said Mayer had joined just as the company was “entering arguably our most challenging moment.”
“It is never easy to come into a leadership position in a company moving as quickly as we are, and the circumstances following his arrival made it all the more complex,” Zhang said.
ByteDance employees told Reuters they were not surprised by Mayer’s decision given TikTok’s unpredictable future, and also because the ex-Disney executive has not had a significant role in some important decisions as he was still new to the team.
Zhang has been the key person in TikTok sale talks, said two people with knowledge of the matter. But Mayer represented TikTok to discuss with senior executives of interested buyers just days ago, a third person said.
TikTok’s decision to launch a $200 million (roughly Rs. 1,478 crores) “creator fund” in July was spearheaded by TikTok’s former head Alex Zhu, though Mayer was also directly involved, said two of the people. The project was initiated internally much earlier than Mayer’s arrival, one of the people said.
“The learning curve was steep for him, from daily operations to geopolitical implications,” said one of the people.
ByteDance did not immediately respond to Reuters’ request for comment.
“Whether TikTok reaches an agreement to sell its US business or decides to duke it out in the courts, the role for Mayer will not be anything like that he had envisioned when he joined,” said Mark Natkin, managing director of Marbridge Consulting in Beijing.
Mayer’s departure is not a great boost for company morale right now, Natkin said.
US India Challenges
Amid growing distrust between Washington and Beijing, Trump complained that TikTok was a national security threat and could share information about users with China’s government.
Trump issued an executive order banning US transactions with TikTok on August 6, effective in mid-September. He issued a separate order about a week later giving ByteDance 90 days to divest of TikTok’s US operations and data.
ByteDance has been in talks to sell TikTok’s North American, Australian and New Zealand operations which could be worth $25 billion (roughly Rs. 184,816 crores) to $30 billion (roughly Rs. 221,801 crores) to companies including Microsoft and Oracle, people with knowledge of the matter have said.
The company has also been targeted in India, where TikTok was one of 59 Chinese apps banned by the Indian government in June following a border clash between India and China.
That month, Mayer wrote to India’s government saying China’s government has never requested user data, nor would TikTok turn it over if asked.
TechCrunch reported earlier this month that ByteDance was in talks with India’s Reliance for investment in TikTok.
TikTok has become a global sensation since ByteDance launched the app in 2017, with operations in countries such as France, South Korea, Indonesia, Russia and Brazil. In April, the app hit 2 billion downloads globally.
© Thomson Reuters 2020
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Social Networking Sites Market 2020 (COVID-19 Worldwide Spread Analysis) by Key Players …
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Leading competitors in the Social Networking Sites market:
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1. North America Country (United States, Canada)
2. South America
3. Asia Country (China, Japan, India, Korea)
4. Europe Country (Germany, UK, France, Italy)
5. Other Country (Middle East, Africa, GCC)
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TOC Snapshot of Global Social Networking Sites Market
1. Social Networking Sites Product Definition
2. Worldwide Social Networking Sites Market Manufacturer Share and Market Overview
3. Manufacturer Social Networking Sites Business Introduction
4. Social Networking Sites Market Segmentation (Region Level)
5. World Social Networking Sites Market Segmentation (Product Type Level)
6. Social Networking Sites Market Segmentation (Industry Level)
7. Segmentation (Channel Level) of Social Networking Sites Market
8. Social Networking Sites Market Forecast 2020-2027
9. Product Type Social Networking Sites Segmentation
10. Segmentation of Social Networking Sites Industry
11. Cost of Social Networking Sites Production Analysis
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