Selling TikTok in the US is a pivotal moment for ByteDance – but a deal is easier said than done

ByteDance has been forced into a corner by the Trump administration, which now says it must sell the US version of its global short video hit TikTok within 90 days if the app wants to stay in business – and there is much at stake.
Analysts say not only is the US market a bellwether for the Chinese internet company’s global ambitions, pulling off a sale is easier said than done due to a complex array of legal and technical obstacles.
“There is credible evidence that leads me to believe that ByteDance … might take action that threatens to impair the national security of the United States,” Trump said in the order announced on Friday.
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Trump’s latest move followed an executive order he issued on August 6 that would prohibit certain transactions in the US with TikTok unless ByteDance divests it within 45 days. Trump applied a similar order to Tencent Holdings’ super-app WeChat, although the details remain unclear.
Analysts said although the latest move gives ByteDance more time to sell TikTok, it also strengthens Trump’s legal stranglehold on the company.
Microsoft immediately emerged as a front-runner to buy the US operation, and a number of other names have joined the fray, such as Twitter, according to various media reports. But as the Post reported last week, the chances of Microsoft pulling off an acquisition are small, with Twitter’s chances even smaller.
While Microsoft has confirmed it is pursuing a deal to purchase TikTok’s business in the US, Canada, Australia, and New Zealand, its co-founder Bill Gates has described the potential deal as a poisoned chalice.
“Who knows what’s going to happen with that deal,” Gates said in a recent interview with Wired. “But yes, it’s a poison(ed) chalice.”
Some observers have touted the possibility that ByteDance CEO and founder Zhang Yiming could simply walk away from the US market given that TikTok’s China-only sister app Douyin earns the bulk of both apps’ revenue – but losing the US would be a bitter pill to swallow for Zhang and could slow TikTok’s wider growth down in the short term.
“TikTok has been placed in an impossible situation,” said Joe Albano in an article for his analysis service called “Tech Cache” on investor community Seeking Alpha. “It either gets bought or banned, and neither scenario offers high hopes that it will continue on its popularity path.”
Other western countries, including France, have also launched probes into TikTok on the grounds that its aggressive data collection approach invades personal privacy, posing a national security threat. Unlike the US however, a recent investigation in Australia found that it does not pose a security threat, according to a Sydney Morning Herald report.
There is of course a third way for ByteDance, which is to challenge the Trump administration’s decision in the courts – an avenue it said it is pursuing, saying it will “pursue all remedies available” to “ensure the rule of law is not discarded”. As of publication, a lawsuit has yet to be filed though.
ByteDance did not immediately respond to a request for further comment on the issues raised in this article.
But the sale of TikTok throws up some complex technical problems, such as auditing all of the code and servers, that could take months or even years to fix, according to experts.
TikTok and other apps from the ByteDance family are famous for their AI-powered recommendation system, which feeds curated content to users based on their interests.
In 2018, ByteDance engineer Cao Huanhuan unveiled some of the technology behind its popular Jinri Toutiao news aggregation app in China, and TikTok in June this year shared some technical details on its website.
Both outlined similar mechanisms to match a user’s interest with content. Functionally and technically, TikTok is similar to other ByteDance products that take into account three elements: user interaction on the app, such as liking a clip or following an account; what the content contains – in the case of short video, things like sounds and hashtags; and what “…
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