App’s ‘secret source’ algorithm reportedly core to operations of parent company, which sources say make a sale highly unlikely
ByteDance would prefer to shut down TikTok rather than sell it if the Chinese company exhausts all legal options to fight legislation to ban the platform from app stores in the US, four sources said.
The algorithms TikTok relies on for its operations are deemed core to ByteDance’s overall operations, which would make a sale of the app with algorithms highly unlikely, said the sources close to the parent.
Though TikTok is ultra-popular, boasting more than a billion users, it still operates at a loss, accounting for a small share of ByteDance’s total revenues and daily active users. The parent company would rather have the app shut down in the US in a worst-case scenario than sell it to a potential American buyer, they said.
A shutdown would have limited impact on ByteDance’s business, while the company would not have to give up its core algorithm, said the sources, who declined to be named as they were not authorised to speak to the media.
ByteDance said late on Thursday in a statement posted on Toutiao, a media platform it owns, that it had no plan to sell TikTok, in response to an article by The Information saying ByteDance is exploring scenarios for selling TikTok’s US business without the algorithm that recommends videos to TikTok users.
In response to a request for comment, a TikTok spokesperson referred to ByteDance’s statement posted on Toutiao.
TikTok’s CEO, Shou Zi Chew, said on Wednesday the social media company expects to win a legal challenge to block legislation signed into law by Joe Biden that he said would ban its popular short video app used by 170 million Americans.
