Big Technology

Why the TikTok Deal Could Blow Up in Its Buyer’s Face

A series of under-appreciated risks make acquiring TikTok anything but a sure thing

Alex Kantrowitz
OneZero
Published in
4 min readSep 3, 2020

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Closeup of TikTok logo on smartphone.
Photo: Sheldon Cooper /SOPA Images/LightRocket/Getty Images

As TikTok owner ByteDance prepares to sell the app’s U.S. operation, some are already calling the deal a bargain, or the next Instagram. But this acquisition is filled with risks that the popular discussion has largely ignored.

A social app is a delicate piece of merchandise, one that will break in the hands of people who don’t know what to do with it. The leading bidders — Oracle, and a combination of Microsoft and Walmart — are understandably jumping at the chance to buy the hottest app on the planet. But the bear case on TikTok, however unpopular, is well worth considering.

Here are the main factors I’d worry about before signing the contract:

Leadership

When Marissa Mayer bought Tumblr for $1 billion in May 2013, she said Yahoo would keep its hands off the app. “We won’t screw it up,” she promised, just before screwing it up. Yahoo’s uninvolved approach with Tumblr was the problem, as the app stayed stagnant and grew irrelevant. Without constant reinvention, consumer social apps go the route of Tumblr, Vine, and Myspace. They die. Facebook has only kept…

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Alex Kantrowitz
OneZero

Veteran journalist covering Big Tech and society. Subscribe to my newsletter here: https://bigtechnology.com.