Facebook Could Soar on TikTok Ban

Apps & Software

Published: June 24, 2024 6:40 am

24/7 Insights

TikTok competes directly with Reels from Meta Platforms Inc. (NASDAQ: META).
So, Facebook is the winner if a TikTok ban goes into place.

The TikTok ban, signed by President Biden in April, is real. Several media stories recently have reminded their readers that TikTok could virtually disappear in the United States. Who is the winner? The answer is Reels.

Meta Platforms Inc. (NASDAQ: META) describes Reels as a “gateway to help you find new audiences, express yourself, and earn money on your own terms.” TikTok could describe itself exactly that way, though it is not a modest-sized place for people to post short videos. TikTok has 148 million monthly unique users in the United States.

How important is TikTok to people who use it to make money? “Influencers” who successfully sell products and services on TikTok can make over $100,000 a year.

How big a prize is the TikTok revenue? The company brought in $16 billion last year, which is about 15% of China-based parent ByteDance. Facebook brought in $36 billion in its most recent quarter. TikTok would be a meaningful contributor to Facebook’s top line.

Ben Smith of Semafor recently reminded his readers that “Blake Chandlee, the president of global business solutions at ByteDance, spoke about TikTok for nearly 45 minutes without mentioning the fact that President Joe Biden had signed a law in April threatening to ban it.” Of course, Chandlee didn’t mention it, but Smith made a simple point. TikTok competes directly with Meta’s Reels. Facebook is the winner if a ban goes into place.

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