Whatâs Going On Here?ByteDance â the parent company of viral video app TikTok â isnât just the worldâs most valuable startup: a report on Wednesday showed itâs also wildly profitable. What Does This Mean?Everyoneâs favorite venue for videos of dancing teddies and clothes-wearing dogs more than doubled its revenue to $17 billion in 2019, while also recording a profit of $3 billion. Thatâs roughly $2 profit for each of its 1.5 billion monthly users â and weâre talking good old-fashioned net income, not the creative metrics some startups have been known to use.
Those numbers put Beijing-based Bytedance in socialâs big leagues, beating YouTubeâs $15 billion revenue and closing in on Instagramâs $20 billion haul. And in even more promising signs, the figures are from before COVID lockdown â which has inspired a whole new cohort of teens, celebrities, and grandparents to film their own #wipedownchallenge vids. Why Should I Care?For markets: A Chinese star.
TikTok is the first Chinese-built app to break out among western users: WeChat and Weibo have hundreds of millions of domestic users, sure, but theyâve struggled elsewhere. ByteDance has enjoyed success in China for years with news service Toutiao and Douyin â essentially TikTok in Chinese â but it wasnât until its 2017 purchase of Musical.ly that the company finally reached a global audience. Analysts now reckon Bytedance would be valued at up to $180 billion if it sold shares in an initial public offering. Itâs probably not in any rush, mind you: the companyâs reportedly sitting on $6 billion in cash.
The bigger picture: Locking down your dollars.
As people spend more time at home these days, a new economy â the kind that suits TikTok to a, er, T â is emerging. Comfort foods are doing well, with Papa Johnâs and Dominoâs Pizza both reporting increased sales this week, while TV-streaming is booming. And demand for consumersâ downtime is only going to get fiercer: AT&T is the latest to try its luck with the launch of HBO Max on Wednesday. | 