TikTok is about to triple its ad revenue in 2022 and will reach more than $11 billion – more than Twitter and Snapchat, combined.
The Chinese-owned social media app is owned by the firm ByteDance and has more than 1 billion usersĀ being one of the most popular social media platforms in the world.
An analyst at Insider Intelligence, Debra Aho Williamson, stated:Ā āTikTokās user base has exploded in the past couple of years, and the amount of time users spend on the app is extraordinary,” commenting on the huge success the company has seen.
Reuters reported:
Twitter estimates to generate around $5.58 billion in advertising revenue this year, while Snapchat is expected to bring in $4.86 billion. Earlier this year, Breitbart NewsĀ reportedĀ thatĀ users spent around $2.3 billion on the popular video-sharing app TikTok in 2021. This includes transactions made on the iOS version of TikTokās Chinese counterpart app Douyin which is more heavily censored in order to align with Chinese law.
TikTok enjoyed 77 percent year-on-year growth up from $1.3 billion in 2020. Consumer spending on the app reached $824.4 million in the fourth quarter of 2021, more than double the $382.4 million generated by the app during the same period in 2020.Ā
TikTok has previously tried to distance itself from China, after the company’s close ties to the Chinese government came under scrutiny. Insiders say that ByteDance staff still receive government offers from Beijing.
In a lawsuit from 2020 TikTok stated: āTikTok is not and has never been offered in China,ā saying that it was unfair that former President Donald Trump’s administration has tried to ban the app.
Last November, ByteDance reorganized the company to make distinctions between TikTok and its Chinese products.
It’s been rumored that the Chinese Communist Party (CCP), has been using the app to spy and collect data from its western users and according to some current and former employees, ByteDance holds a huge amount of influence from their headquarters in Beijing.
Business Insider was told by four current and former employees of the social media giant that products from TikTok require calls with employees at ByteDance, who give final product decisions from Beijing.
On March 10, Reuters had reported that TikTok was in deals with Oracle Corp (ORCL.N) to prevent its Chinese parent company having access to users’ data.
Reuters reported:
The agreement would come a year and a half after a U.S. national security panel ordered ByteDance to divest TikTok because of fears that U.S. user data could be passed on to China’s communist government.
That order was not enforced after Joe Biden succeeded Donald Trump as U.S. president last year. The panel, however, known as the Committee on Foreign Investment in the United States (CFIUS), has continued to harbor concerns over data security at TikTok that ByteDance is now hoping to address, the sources said.
It is not clear whether CFIUS will find that TikTok’s partnership with Oracle will resolve the national security issues it has identified, the sources said. A spokesperson for the U.S. Department of the Treasury, which chairs CFIUS, did not immediately respond to a request for comment.
Oracle had discussed acquiring a minority stake in TikTok in 2020, when ByteDance was under U.S. pressure to sell the app. The cloud computing giant will store all of TikTok’s U.S. user data on Oracle data servers under the new proposed partnership, the sources said. Some of TikTok’s data is currently stored on Alphabet Inc’sĀ (GOOGL.O)Ā Google Cloud.
A dedicated U.S. data management team of hundreds of people acting as a gatekeeper for U.S. user information and ringfencing it from ByteDance will be set up under the agreement, the sources said. The team will be comprised of engineers and cyber security personnel. The companies are discussing a structure under which that team would operate autonomously and not be under TikTok’s control or supervision, the sources added.
TikTok is also exploring partnerships with other technology companies over firewalls and cyber security measures, the sources added.