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How TikTok could fail

How TikTok could fail


It’s only a year old, but it already faces significant challenges around the world

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Illustration by Alex Castro / The Verge

With Facebook under antitrust scrutiny around the world, the company is spending more time making the case that it is beset on all sides by competitors. There are other messaging apps, other professional networking apps, and other video apps. And when it comes to good old-fashioned social networking — public broadcasts, following influencers, and that sort of thing, there’s TikTok.

”In just three years, TikTok has become one of the world’s most popular online social network platforms,” Facebook wrote today in a letter to Rep. David Cicilline, D-RI, who has championed an antitrust inquiry into the company. “The app has been downloaded more than one billion times globally, is available in more than 150 countries, and in 2018 was installed more times than either Facebook or Instagram.”

TikTok’s ubiquity is all the more striking considering that it just celebrated its first birthday on August 2nd. That’s when the Chinese company ByteDance, which had bought an American app named in November 2017, rebranded it as TikTok. In the year since, the app has become a global hit, thanks to a core feed powered by machine learning that’s entertaining even if you never follow anyone. (TikTok’s “duets” feature, which allows you to easily remix others’ content, also skillfully married a strong creative tool with a useful engagement hack.)

At the same time, much of TikTok’s growth has been bought and paid for by ByteDance investors.The company spent nearly $1 billion on advertising the app in 2018, the Wall Street Journal reported in June. And platform executives familiar with ByteDance’s spending have told me that a significant majority of new users still abandon the app within 30 days.

And so as TikTok enters its second year — and becomes a key talking point in Facebook’s this-market-is-competitive-we-swear global tour, how durable should we expect it to be?

TikTok clearly has a lot going for it: it’s a bona fide cultural phenomenon, as you can see from the way it propelled Lil Nas X’s “Old Town Road” to the longest-ever reign atop the Billboard charts. ByteDance already has several hugely popular apps around the world, and the startup’s $75 billion valuation gives it the resources to compete with anyone. (Most recently it declared ambitions in web search.) The company also has a famously workaholic culture, access to much of the best talent in China, and a recent influx of American executives.

But the company also faces some real risks in the near future. Here are four:

One, TikTok has to fix its funnel. Too many people try TikTok, use it a few times, and never return. We saw something happen similar with Twitter years ago. The app developed universal awareness among Americans, but most who downloaded Twitter abandoned it shortly thereafter. With TikTok spending $3 million a day on ads in the United States, it could become a household name in short order. But if it can’t sustain users’ interest, it could find itself mired in the same trough of despair that Twitter has been in for most of its life.

Two, TikTok has to keep shipping hits. Every social app is, on some level, a fad, and those that don’t evolve are doomed to fade away. (See Vine or, more recently, HQ Trivia.) Any novel social app can have a good year — it remains to be seen to what extent TikTok’s video feed has staying power. Something to watch closely: what new features does TikTok launch in the next 12 months? Both Vine and HQ felt novel at launch but never meaningfully iterated on their core experience; Snapchat survived by following up its original hit (disappearing messages) with something even bigger (ephemeral stories.) If TikTok is going to survive, it has to be less like Vine and more like Snap.

Three, TikTok has to court influencers — and keep them happy. Celebrities on social media tend to go two places: wherever the audience is, and wherever the money is. A fast-growing new social platform has an easy time attracting influencer interest, because it tends to be easier to grow an audience there than on a more established platform. But influencers are liable to leave if the audience, or the money, is better elsewhere. (That’s another lesson from Vine.)

And so it’s at least of moderate concern that TikTok has so far offered users no direct way to make money in the United States. (It does in China.) TikTok is already arguably less attractive to influencers than, say, Instagram, because the app is designed to work even if you never follow a single creator. Then again, Instagram still doesn’t really offer users a direct way to make money from their posts, either, unless you count its experiments around e-commerce.

Four, TikTok has to manage its relationship with regulators around the world. ByteDance has already run afoul of the US government, settling privacy concerns with the Federal Trade Commission in February for $5.7 million. But a larger concern should probably be the trade war with China, which has found the United States much more skeptical of Chinese businesses generally. (See this year’s blow-up over Chinese ownership of Grindr.)

The Chinese version of TikTok is already a propaganda outlet for the government. What happens if TikTok becomes a propaganda outlet for China here in the United States? Think Russia’s RT network, but with 1 billion monthly users and an algorithmic feed that it can manipulate however it wants. That seems like something the US government might take an interest in, too.

Of course, ByteDance also has to stay out of trouble with its own government, which has repeatedly chastised it for failing to censor everything it’s supposed to under Chinese law. It’s a lot to work through.

Maybe a year from now TikTok will be much bigger than it is today. But looking at what the startup is up against, it’s easier for me to make the case that it won’t be. The odds are long for any startup, and the odds for a social startup are even longer. It’s not hard to envision TikToks losing momentum as its novelty fades. And if it does, Facebook will lose a genuine competitor — not to mention a highly lucrative advertiser.


Senators Urge Google to Give Temporary Workers Full-Time Status

A group of Democrats wants Google to stop relying on contractors to do the majority of jobs at the company. Daisuke Wakabayashi:

The letter, written by Senator Sherrod Brown of Ohio, also urged Google to stop its “anti-worker practices” and treat everyone at the company equally.

“Making these changes to your company’s employment practices will ensure equal treatment of all Google workers and put an end to the two-tier employment structure you have perpetuated,” Mr. Brown wrote. Among the 10 senators who signed were three running for president: Kamala Harris, Bernie Sanders and Elizabeth Warren.

Trump Boosts Fired Google Engineer Who Proposed Richard Spencer Fundraiser, Suggested Skinheads Rebrand

The latest man to be fired from Google for harassing his coworkers is working to become a cause celebre in conservative media, and he’s getting support from the president. Tom McKay:

By Monday evening, Trump was posting clips from a Fox News interview with a former Google engineer who claimed the company discriminated against him for his conservative political views. In reality, said employee had reportedly urged other Googlers to contribute to a “bounty” to find an individual who punched white supremacist Richard Spencer, as well as suggested that the Golden State Skinheads (GSS) rebrand so as to provide better “branding” for the “American nationalist Right.”

How the Trump Campaign Used Facebook Ads to Amplify His ‘Invasion’ Claim

I linked to a tweet on this subject yesterday, but it’s worth linking a full story on it. This one’s from Thomas Kaplan and includes lots of examples:

President Trump’s re-election campaign has harnessed Facebook advertising to push the idea of an “invasion” at the southern border, amplifying the fear-inducing language about immigrants that he has also voiced at campaign rallies and on Twitter.

Since January, Mr. Trump’s re-election campaign has posted more than 2,000 ads on Facebook that include the word “invasion” — part of a barrage of advertising focused on immigration, a dominant theme of his re-election messaging. A review of Mr. Trump’s tweets also found repeated references to an “invasion,” while his 2016 campaign advertising heavily featured dark warnings about immigrants breaching America’s borders.

Legal Shield for Websites Rattles Under Onslaught of Hate Speech

Daisuke Wakabayashi examines the fight over Section 230:

There is also a concern that the law’s immunity is too sweeping. Websites trading in revenge pornography, hate speech or personal information to harass people online receive the same immunity as sites like Wikipedia.

“It gives immunity to people who do not earn it and are not worthy of it,” said Danielle Keats Citron, a law professor at Boston University who has written extensively about the statute.

Election security: The scramble to secure America’s voting machines

Yikes to this big Politico investigation:

Many election officials have been slow to buy paper-based machines, due either to a lack of money or to disbelief in the experts’ warnings. In D.C., lawmakers are split along party lines over whether to require states to use paper. And in many states, no central authority decides what voting equipment to buy, leaving the purchases up to local governments.

Meanwhile, national security and intelligence officials warn that future elections remain targets for hackers — and that Russia will be back.

Microsoft: Russian state hackers are using IoT devices to breach enterprise networks

And speaking of Russia, from Catalin Cimpanu:

One of Russia’s elite state-sponsored hacking groups is going after IoT devices as a way to breach corporate networks, from where they pivot to other more high-value targets.

Attacks have been observed in the wild said the Microsoft Threat Intelligence Center, one of the OS maker’s cyber-security divisions.

Japan’s FTC investigating Apple over pressure on parts makers

“Japan’s Fair Trade Commission is investigating Apple Inc over its pressure on Japanese parts makers and whether it abused its power in violation of antimonopoly rules,” Reuters reported, citing the Mainichi newspaper.

The investigation is the latest by the country’s regulators against the tech giant after they found last year that the company may have breached antitrust rules on the way it sold its iPhones in Japan.


Dayton shooting: Shooter appeared to have leftist Twitter feed

The Dayton shooter retweeted leftist and anti-police posts on Twitter, CNN reports.

Snap Raises $1 Billion in Debt for General Costs and Potential Acquisitions

Snap plans to raise $1 billion in debt, in part to go shopping — and in part to keep the lights on at its still unprofitable business, Sean Burch reports:

The convertible senior notes will have a due date of Aug. 2026, according to Snap. The proceeds will be used to cover general operating costs, Snap said, but may also be used to “acquire complementary businesses, products, services or technologies.” Snap said it could also be used for stock repurchases, although it has no immediate plans to do so.

Snap shares dropped 0.3% in early trading on Tuesday, hitting $16.40 per share.

Here’s the Memo Currently Going Viral at Google

Vice got a hold of a memo from a Googler who alleges discrimination related to her pregnancy:

Monday, Motherboard published an article about a memo written by a Google employee titled “I’m Not Returning to Google After Maternity Leave, and Here is Why.” The memo, which alleges retaliation and discrimination against the author while she was pregnant, has gone viral inside the company over the past week, and has been read by more than 10,000 employees there.

The memo has spurred employees to post memes defending her on an internal message board.

YouTube’s ‘creator-on-creator’ harassment policy could affect commentary videos

YouTube CEO Susan Wojcicki indicated that the company is taking a fresh look at bullying between creators. She made these comments in the interview with YouTuber Alfie Deyes linked here yesterday. Here’s Julia Alexander:

YouTube CEO Susan Wojcicki indicated that certain types of commentary videos and online punditry could be in trouble as the company prepares to institute a new policy around “creator-on-creator” harassment. YouTube faced criticism recently after neglecting to take action against one pundit’s channel after he made homophobic comments about another YouTube personality.

The company’s current harassment rules aren’t effective enough anymore in the eyes of YouTube’s executive team, Wojcicki told vlogger Alfie Deyes in an hour-long interview. There aren’t any explicit details about the new policy that Wojcicki is ready to share, as it’s still in development, but the goal is to come out with a set of rules surrounding the way creators talk to and about one another that can curb a form of harassment that has sprung up over the last few years.

YouTube Terminated The Account Of A 14-Year-Old Star Over Her Anti-Gay Video

Good riddance. From Joe Bernstein:

YouTube has removed the account of Soph, a 14-year-old girl who accumulated nearly a million followers through racist and anti-Muslim videos, after she uploaded an anti-LGBTQ video on July 31.

In the video, a 12-minute anti-gay rant titled “Pride and Prejudice,” Soph encourages her followers to “make sure to blame me in your manifestos” — a direct reference to the kind of document posted to 8chan by the Christchurch shooter who killed 51 people in March. On Saturday, the El Paso shooting suspect would also publish a manifesto to 8chan before killing 22 people.

Baby Boomers Can’t Stop Sharing Photos Of Their Grandkids. Millennial Parents Aren’t Happy.

Katie Notopoulos writes about the struggle of some parents to prevent their relatives from posting photos of their children online:

“My parents constantly tag themselves in photos of my kids, opening the photos up to an almost unlimited audience. It’s maddening,” said Ashley. “Even my uncle — whom I’m not close to but treats Facebook like it’s his job — screenshot a photo of my son after his birth and posted it for his 4,000 (!!!!) Facebook friends to see with my son’s full name and place of birth within an hour after I had him.”

After Ashley asked her husband’s parents to stop tagging, she said they were offended but followed through.

The Digital Undertakers: Inside the Obsessive Community Racing to Put the Dead Online

Katie Reid profiles FindAGrave a crowdsourced site for documenting our final resting places:

With 180 million entries, it is the largest gravesite collection on the internet. Owned by genealogy giant, Find A Grave differs in one major way from the company’s other sites: it seems to be composed entirely of user-generated material. Though the site has become a popular resource among genealogists and family historians, Ancestry claims no legal responsibility for the accuracy of Find A Grave’s information. Instead, much of the content creation and moderation work is left to a sprawling community of volunteers. It’s a Wikipedia of the dead, albeit with far fewer rules.

From that community has emerged a strange and unlikely group of contributors who have made an obsessive hobby out of personally documenting the deaths of thousands, even millions, of total strangers.

And finally ...

Sorry but I’m still stuck on the feral hogs.

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