> Bytedance now faces questions over when or even how it will start making a profit.
$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?
> $75B value and it still faces the most basic question. Makes me feel I don't understand business at all.
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.
The number is still a bit confusing for an outsider though, no?
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?
FB has 1.5B DAU, Twitter - ~150M DAU. Bytedance has ~200M DAU, and about the same revenue as Twitter. So, Bytedance DAU is valued as an FB DAU - probably reflects expectations that it can get to the FB level (ie. 3x) of per-user revenue extraction and not ends up like Twitter/Snap.
Where are the bulk of their users based? I assume China right? Surely the ARPU in China is way less than the USA where FB/Snap/goog/twtr own most of the market.
Tik Tok is mainly videos though, that is huge difference in the price of ads.
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.
You're implying that Instagram users are wealthier than twitter users? That's 1) only tangentially relevant to ad income. 2) unsupported. 3) probably wrong
Not a fan of the company, but they are much more than musical.ly.
- 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.
I've never used Musica.ly myself, and I don't have any kids of my own, but I came across this video [0] where a Youtuber looked at clips from it. It seems like a lawsuit waiting to happen, I can't see how it could be worth that much money. I wouldn't want any of my future kids anywhere near there.
GP was wrong. They acquired musica.ly in 2017 for $800 million. Musica.ly accounts for a minuscule portion of their valuation. The article itself clearly spells out what Bytedance's main businesses are, but commenters don't appear to want to read!
I can't see how it's worth close to $800 million either. Besides the icky sexualized content, isn't ads to kids illegal in most countries? How are you going to monetize that market? And even if it's legal, how moral is it?
> I can't see how it's worth close to $800 million either.
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.
> It's worth $800 million because someone was willing to buy it for $800 million.
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.
All I could say is that if there were a clear way for monetizing their user base musical.ly would not have been sold for that price. But it is not very relevant to Bytedance's valuation or main businesses either way.
musical.ly never had the same level of success TikTok now has, and it probably hasn’t focused on monetization at the time it was sold. Plus Bytedance owns quite a few apps many of which are extremely popular
How is that site not shut down? The guy in the video was correct. If you had any one of those clips on your computer alone, you'd be going to jail. Now that a company has figured out a way to monetize it, they can do it at scale?
Its main app isnt musically, its Jinri Toutiao, a news app that has reputedly $2B revenue. TikTok, Musically is just its new acquisitions and ventures. It owns a vast array of video content based sites and apps.
抖音(Dou Yin), or Tik Tok, is a huge traffic sucker in China. They went from millions MAU to now 100 millions of DAU in just one year. People are spending like hours on this app alone every day, and it is the perfect platform for commercials as well, could almost go unnoticed if it is well made.
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.
I was digging to find it but gave up. if musical.ly is their main app then this is surely an overestimation of their valuation. I haven't heard a single good thing about musical.ly, but maybe that's just because it's not my crowd.
Its not necessarily musical.ly but its Chinese counterpart, Douyin. Douyin is absolutely massive in China, think Snapchat/Instagram/Vine but much more popular.
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.
I truly hope the advertising driven tech industry dies and a general paid service model takes it place. The long term affect adverts have on humans cannot be positive.
They go away eventually on open platforms, because blocking. That's why lots of firms push closed platforms. That's why humans should use open platforms.
Advertisers not using ads to inform their target potential market, but instead choosing to use them to mislead and trick the consumer, are the reason for this.
$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?