TikTok & U.S - A story of business competition.

Naqiyyah Petladi,

The Indian Learning Magzine

Indian Society of Artificial Intelligence And Law

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Tiktok hasn’t made much revenue in the US yet – however, statistics show that usage of the app has blown off the roofs. With 80-100 million daily active users, President Donald Trump issued an Executive order banning any transactions with TikTok. Despite TikTok being the new “in” tool for Gen Z’ers, the algorithm used by the platform is catered to the user’s likes and dislikes, and follows a more unconventional approach where “the content finds you”.

This algorithm is a much less popular one amongst social media platforms, making Tiktok very addictive.

TikTok is in the talks of being acquired by Microsoft as per the executive order by the government. This isn’t such a bad business plan as Microsoft is not a direct competitor in comparison to Instagram, Facebook, etc. However, there is a risk of Chinese users being offended/uncomfortable with the content now created after the newly acquired platform by Microsoft. This can largely be due to the cultural barriers. Microsoft may not necessarily be able to jump over the barriers as smoothly as Chinese tech companies were able to do.

There is also an issue of privacy. Chinese users may be uncomfortable with the idea of what exactly Microsoft is acquiring. The thought of private information of Chinese users being transferred, known and analysed by an American company may be very daunting for the country. As long-known rivals, this can be a very unsettling move, as the last thing the Chinese would want is their confidential information given to the Americans on a golden, shiny platter, considering how secretive the nation is. Nonetheless, Microsoft is not very well-equipped to handle a millennial social media platform very well given their past experiences, and also because as Rui said, they don’t have a long consumer DNA. However, Tiktok can be a valuable asset for Microsoft.

On the other hand, Tiktok can be independent in the west. However, this is not very likely given the government’s sentiment towards this business model. In such a scenario, the newly acquired social media app can flourish largely not only in the US but worldwide. An independent and appropriately correct management can make it a very fascinating competitor to other tech giants.

Tiktok is often compared to Instagram Reels, and although Reels is an amateur, it has kicked off very well. With the new upgrade, Reels has a specific home feed, and its physical feed look is very much similar to Tiktok. This makes Reels a much-used feature on Instagram, considering the Tiktok ban in numerous countries like US, India, etc. In fact, the algorithm adopted in Reels is very much similar to Tiktok. The ‘content comes to you’ notion is very dedicatedly upheld by analysing likes, dislikes, loops played, etc by each and every user. However, Instagram is overloaded with features and thus, this can make the usage of Reels a bit overwhelming. This makes Tiktok a very sharp, and clear cut competitor who is keeping things very simple, less confusing and efficient.

To conclude, despite the great success behind Tiktok in US, Trump’s ban has received a negative reaction from millions of users. However, the acquisition by Microsoft can potentially bring Tiktok back in the US markets bigger, and better and can make the social media platform a very interest competitor amongst the biggest tech companies in the world.