This week was the deadline for ByteDance to divorce itself of TikTok over security concerns, but at press time no deal has been struck. Instead, we have the strangest of corporate entities now taking shape. And, thanks to journalists at the New York Times, we have perhaps the most delicious morsel of reporting to ever emerge from TikTok deal talks.
Let’s take a look at the latest.
The first thing to say is that we may see action from President Trump within days — and that, if he approves the deal, we could soon see a TikTok IPO. Here are Alex Sherman and Lauren Feiner at CNBC:
President Donald Trump is expect to decide on TikTok’s fate in the U.S. in the next 24-36 hours, sources told CNBC’s David Faber.
To address ownership concerns, ByteDance plans to do an initial public offering of global TikTok on a U.S. stock exchange, according to people familiar with the matter. Oracle will also own a minority stake that will be less than 20% of the new global TikTok, two of the people said. Walmart will also take a stake, though its size is still unknown, according to two of the people.
On the other hand, Trump told reporters Wednesday night that he was “not happy about what he was hearing about the bid.” (He was expected to be briefed on Thursday morning.) In the meantime, for reasons we covered here Monday, Trump is facing increasing pushback from Republican members on the deal as it is currently proposed. Here are Saleha Mohsin, Nick Wadhams, and Jennifer Jacobs at Bloomberg:
The Oracle agreement is facing sharp pushback in Congress, where some lawmakers have argued that its terms don’t go nearly far enough to address the reason why Trump demanded the sale in the first place. A letter sent to Trump on Wednesday by Senator Marco Rubio of Florida and five other Republicans said the deal in its current reported form “leaves significant unresolved national security issues.”
In a separate letter to Mnuchin, Texas Senator Ted Cruz also said the deal fell far short. Like other opponents, Cruz called for an “outright sale” of Tiktok if necessary. Some have also demanded TikTok turn over the algorithm that helps determine the content seen by users.
Elsewhere at Bloomberg, Wadhams and Shelly Banjo report that ByteDance is prepared to give its “trusted technology partner” full access to the code base. The idea, they write, is “to make sure there are no back doors used by the company’s Chinese parent to gather data on the video-sharing app’s 100 million American users.” The sides are said to have agreed in principle on these changes. But it’s still hard to imagine those concessions swaying Rubio, Cruz, and possibly the president.
All of which leaves us more or less where we were when the week began — waiting for the most erratic president in living memory to decide what he wants to do with this thing. But if you are the sort of person who likes to imagine what could be — to dream of a richer, more vibrant world, where each day brings stories that would fill up this column until it overflowed with Shakespearean drama and intrigue — well, here are David McCabe, Erin Griffith, Ana Swanson and Mike Isaac:
While rushing to secure a deal, TikTok is also hunting for a permanent chief executive to replace Kevin Mayer, who resigned in late August, citing the changing political pressures of the role. Vanessa Pappas, the general manager of TikTok in North America, took over in the interim.
Among those whom TikTok has talked to about the job is Kevin Systrom, a founder and former chief executive of Instagram, people briefed on the matter said. Talks are preliminary, and no final decisions have been made, they said.
Reader, I screamed. There are few stories about Facebook’s leadership team that I have followed with more interest over the years than that of Instagram’s co-founders and their abrupt 2018 departure from the company. I got some closure on that mystery earlier this year, when Sarah Frier wrote the most comprehensive account to date of Instagram’s story. Frier’s book No Filter reveals how Systrom and his co-founder, Mike Krieger, were gently managed out of the company once their vaunted independence came to be seen as a liability.
Systrom has been nothing but polite about Facebook in his public statements since leaving the company. In 2019 he told Josh Constine he wanted to find “the next wave,” in a comment I took to mean that he had no plans to start another social network. He and Krieger have spent the past couple years kicking around new ideas together, and earlier this year they produced RT.live, a beautiful and useful real-time tracker for understanding the spread of COVID-19 in each state.
And yet, if Systrom harbored some desire to get back in the game — and start on third base — it’s hard to imagine a more intriguing perch than TikTok. The app is dominant among the younger generation, and yet it still feels as if the company is just scratching the surface of what it could become. It seems possible that TikTok could be the canvas Systrom had once hoped Instagram could be for him over the long term — a quasi-independent company that would allow him to nurture a community, invent new creative tools, and win in business.
On the other hand, Kevin Mayer probably thought that way about TikTok, too — and he only lasted in the job for three months. Even if the geopolitical concerns around TikTok are somewhat resolved, they won’t go totally away. And it’s unclear that Systrom would have any more freedom working for the unholy combination of Larry Ellison and Walmart than he had working at Facebook. The new boss, in other words, might look a lot like the old one. I have a much easier time picturing Systrom and Krieger starting a new company than trying to fit themselves into whatever strange beast may be birthed out of ByteDance.
That said, I have no doubt Systrom at least had a conversation or two. Who wouldn’t? The best case scenario is you find a fantastic new role for yourself. And if you don’t like what you hear, there’s still a good chance the news will leak and you can send a shiver up the spine of every person you used to work with in Menlo Park.
Ultimately, I don’t think Systrom would take the job at TikTok. But I sure am glad he took the call.
Today in news that could affect public perception of the big tech platforms.
🔼 Trending up: Facebook announced new policies to limit the spread of groups that promote violence and share health advice. It will no longer recommend these groups to users. It’s also restricting groups that promote violence from search and reducing how often their content shows up on people’s News Feeds. You can read the full policy change here. (Salvador Rodriguez / CNBC)
⭐Facebook critics say Mark Zuckerberg’s commitment to his company’s growth has led to an alliance of convenience between the world’s largest social network and the White House. I actually have a very different view of the facts presented here — let’s talk about it again next week. Here are Sarah Frier and Kurt Wagner at Bloomberg:
As employees started to worry about Facebook’s proximity to the Right, Facebook’s M-Team—“M” for management—seemed intent on pushing the company even closer to it. At one point, the group flew to New York for a leadership off-site at the headquarters of News Corp., which like Fox News is controlled by Rupert Murdoch and his family. One executive, Instagram co-founder Kevin Systrom (who left the company in 2018), refused to attend, citing Fox’s polarizing influence, according to a person familiar with the matter. The company says it regularly meets with media outlets. Systrom didn’t respond to a request for comment.
Eventually, Trump pushed the limits. In the early morning hours of May 29, he posted a message to his 29.5 million Facebook followers, warning protesters in Minneapolis that they were risking violent retribution. “When the looting starts, the shooting starts,” the president wrote. It was a formulation that’s long been associated with police brutality. A similar threat was used by the segregationist presidential candidate George Wallace.
Mark Zuckerberg outlined a new set of principles to guide employee debates within Workplace, Facebook’s internal social network. The company is getting more specific about which parts of Workplace can be used to discuss social and political issues. Illustrating once again that there is no easy way to do content moderation. (Salvador Rodriguez / CNBC)
Big Tech companies shared the latest from their work with the US government on election integrity. In a joint statement, tech companies including Facebook, Google and Twitter said they are looking at ways to counter targeted attempts to undermine the election conversation, including “hack and leak” operations which use social platforms to “amplify unauthorized information drops.”
Twitter will prompt high-profile political accounts to take heightened security measures ahead of the 2020 US election. Over the next few days, Twitter will automatically turn on password reset protection for some accounts while recommending they also turn on two-factor authentication. (Makena Kelly / The Verge)
QAnon has upended California politics with a campaign targeting Senator Scott Wiener. As the conspiracy theories grows, hate campaigns against local laws and politicians could become more commonplace. (Julia Carrie Wong / The Guardian)
President Trump’s executive order on WeChat won’t target users who download the app for personal or business communications. The government has yet to clarify which transactions will be prohibited. (Edvard Pettersson / Bloomberg)
Senators Sherrod Brown and Ron Wyden are demanding Amazon stop spying on workers’ social media posts. The move comes in response to an article about the company’s Advocacy Operations Social Listening Team, a group inside Amazon that monitored the closed Facebook groups of Amazon Flex Drivers. (Joseph Cox / Vice)
⭐ TikTok is helping people build massive subscriber bases on OnlyFans, and making them rich as a result. The two unrelated platforms have developed a symbiotic relationship, as fame on one platform leads to more followers on another. Ashley Carman at The Verge has the story:
The tricky part about advertising an OnlyFans on TikTok, though, is that the app would seemingly prefer these users disappear. Its team often deletes their accounts and videos, and the app bans porn, most nudity, and any content that “commits, promotes, or glorifies sexual solicitation or sexual objectification.” In fact, direct links to OnlyFans are banned, TikTok confirmed to The Verge.
Yet, their videos perform well, mainly because TikTok’s own algorithm takes over and surfaces their videos to millions of people around the world. TikTok can’t prevent OnlyFans users from joining, but these women have to find a balance between creating sexy enough content to bring people over to OnlyFans while still operating under the TikTok’s team’s radar.
Facebook is preempting privacy concerns with new rules governing AR and VR. For Project Aria, a headset that will gather data for the development of Facebook’s AR glasses, the company is quarantining data for three days, which it will use to blur faces and license plates. (Janko Roettgers / Protocol)
Facebook launched a new app to let small businesses manage their pages and profiles across Facebook, Instagram and Messenger from a single interface. It’s called Facebook Business Suite. (Sara Fischer / Axios)
Mozilla is introducing a new browser extension, RegretsReporter, to help users better understand how YouTube’s recommendation algorithm works. The extension will send data to Mozilla about how often you use YouTube, and what videos you watch (if you offer that kind of data). (Kim Lyons / The Verge)
Creators are moving into collab houses amid the pandemic. It’s essentially a modern commune. But it pays better! (Calvin Kasulke / Vice)
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