[HN Gopher] TikTok has recently traded at valuations of $105-110...
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TikTok has recently traded at valuations of $105-110B on private
markets
Author : LogicRiver
Score : 70 points
Date : 2020-05-20 21:13 UTC (1 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| EGreg wrote:
| Paywall. Impossible to read it
| digheal wrote:
| http://archive.is/0eXcB
| FriendlyNormie wrote:
| "Investors" in situations where it makes no sense are always
| guaranteed to be scheming central bankster Jews who just print
| money from thin air and use it to steal shit. You should
| bootstrap anything you create, never accept investors or buyers.
| God is watching and judging you retards. Go ahead and keep
| "crushing it" though, what could possibly go wrong.
| mangix wrote:
| Makes sense. The fed's inflated the money supply quite a lot.
| mcfly1985 wrote:
| For reference: 15 years ago, M1 was less than 1 trillion
| dollars. Today it's over 5.
| xoxoy wrote:
| Twitter and Snapchat are both "only" worth around $25B each
|
| This isn't just about a money printer.
| typon wrote:
| Tiktok: 800 million monthly active users worldwide.
|
| Twitter: 330 million monthly active users worldwide.
|
| Snapchat: 360 million monthly active users worldwide.
|
| Maybe TikTok should "only" be worth $50B?
| qppo wrote:
| Are Twitter and Snapchat allowed behind the Great Firewall?
|
| Honest question, I don't know
| snazz wrote:
| According to http://www.chinafirewalltest.com/ (not sure
| how legit it is), twitter.com is blocked and snapchat.com
| is allowed.
| chosenbreed37 wrote:
| So far in this discussion I've figures of 500 million, 800
| million and 1.5 billion users for Tiktok. All staggering
| but rather large degree of variance
| Apocryphon wrote:
| I wonder how many of these traders are Chinese nationals- makes
| me wonder if we're towards a future where it's not just
| American dollars, but also RMB, Gulf Arab petrodollars (as
| we're seeing from the Saudi investment in the Softbank Vision
| Fund), and just dumb cash coming in from every part of the
| world economy. Or maybe we're already there.
| qeternity wrote:
| https://outline.com/YZZ9rB
| mftest wrote:
| Are these guys also funded by Mayoshi Son and Softbank.
| sjroot wrote:
| I really can't fathom how this is possible. The largely young
| demographic (which I'm guessing warrants this valuation) has a
| track record of jumping from platform to platform, whichever is
| trendy for a given year.
|
| With that in mind, how are investors seriously willing to get
| behind this company in such a big way?
| mastermojo wrote:
| In my opinion Tiktok is a viable replacement for Instagram, a
| platform that generates on the order of 10B USD revenue a year.
| They both have pub/sub models where you can follow topics or
| celebrities or content creators you care about. Instagram is
| more photo focused and Tiktok is more video focused. The video
| first format is arguably higher fidelity/more compelling for
| content consumers.
|
| Yes, people jump from platform to platform. Instagram will not
| be king forever, but it will be generating massive amounts of
| money both on the upswing and the downswing.
| sixQuarks wrote:
| Tiktok is also MORE popular than instagram worldwide
| goodside wrote:
| The tendency of young people to jump from platform to platform
| is partially an illusion caused by the fact they don't remain
| young. You see this especially in dating sites -- people used
| to think OkCupid could never make money because it was
| dominated by 18-to-25-year-olds. Now it's mostly people in
| their 30's, and the prior king of 30-somethings, Match.com, is
| for people over 40. The same thing happened with Tinder,
| PlentyOfFish, etc.
|
| TikTok isn't a dating site, but it's certainly "flirty". It has
| specific appeal to socially active teenagers and nearly all of
| the content shows off suitability for dating: looks, dancing,
| fashion, wit, etc. I could imagine adding paywalls to men
| contacting desirable women, or of course just padding the feeds
| of less valuable users with ads.
| echelon wrote:
| > padding the feeds of less valuable users with ads
|
| This is horrifying when you consider this happens in every
| avenue of life and will only become better targeted as
| technology progresses.
| nelaboras wrote:
| i see four scenarios:
|
| 1. insanity 2. lies about numbers 3. massive invasive data
| siphoning and thats actually the basis for the valuation 4.
| tiktok now has a license to vast raw video and personal data
| that users granted them the right to use and resell in
| perpetuity. They obviously don't just keep edited but also raw
| data, videos never published, maybe even entire camera rolls.
| So much data held by a company sheltered behind the Chinese
| state's protection from legal repercussions.
|
| or of course all of the above.
| georgespencer wrote:
| Scenario 5: you didn't read beyond the misleading headline to
| see that it's ByteDance, who own TikTok, and who did $20bn of
| revenue in 2019 (implying a 5x multiple on valuation).
| FanaHOVA wrote:
| ByteDance isn't just TikTok, which is what the headline doesn't
| include. They also own Toutiao (Chinese news/content platform,
| top 100 website in China), Helo (Indian social media, the
| Google Play app alone has 2.2M reviews), Lark
| (https://www.larksuite.com/, an enterprise collaboration
| platform aimed at the Japanese market).
| georgespencer wrote:
| ByteDance did $20bn of revenue in 2019. The comments in this
| thread are... wow. Lots of opinions from my favourite HN
| cameo character, "Person With Vitally Important Opinions
| About Complex Topic But No Time To Read Beyond The Headline."
| thedudeabides5 wrote:
| True, but I'm sure that Bloomberg's paywall isn't helping
| on that front.
| artsyca wrote:
| The paywall issue is listed in the FAQ - as long as
| there's a workaround it's acceptable
| vander wrote:
| The valuation is for TikTok's parent company ByteDance which
| has a large number of products and investments including a
| really popular news aggregation app in China.
|
| Also, TikTok in China, which is its largest market, is popular
| with everyone, young and old. It got to the point of
| threatening WeChat. CEOs of Tencent and ByteDance had a huge
| spat a while back.
| duxup wrote:
| I'm largely with you, although maybe they're thinking of
| YouTube in the scene that it has stuck around for a while.
| yRetsyM wrote:
| Wasn't the same said about Facebook?
| Barrin92 wrote:
| > has a track record of jumping from platform to platform
|
| do they really though? It honestly seems like particular brands
| are very sticky with internet demographics, not just young
| people.
|
| IIRC there even is more brand loyalty among ecommerce than
| there is among physical brick and mortar stores.
|
| You can look at something like Whatsapp as well. There have
| been lots of privacy concerns after the acquisition by Facebook
| but the number of people who actually switch to say, Signal is
| very low. There are huge network effects to these social media
| / communications platforms, and TikTok already has 1.5 billion
| users worldwide.
| TheAdamAndChe wrote:
| In my experience, the claim that the younger generation hops
| around is fair. I'm 26. Between the ages of 15 and now, my
| primary social media platform has hopped between Myspace,
| Facebook, Reddit, 4chan, YouTube, some diary site,
| PSN(PlayStation Network), Hacker News, and probably others.
| I've dipped my toes into countless other ones. I've kind of
| stopped hopping around as much, but other people my age still
| hop between newer ones like Instagram, tiktok, and others.
| searchableguy wrote:
| That isn't true. Outside of teens in tech or nerdy places,
| most won't switch to the next hyped thing. I have been
| trying to get people on session and pleroma but most of
| them don't care.
| Izkata wrote:
| > some diary site
|
| LiveJournal?
| TheAdamAndChe wrote:
| Nah, some other one. I know what it is, but I don't want
| it to leak in case someone associates this account with
| my real identity.
| redis_mlc wrote:
| > I've kind of stopped hopping around as much
|
| So at 26, you're getting old? :)
| chosenbreed37 wrote:
| 1.5 billion users already. That's staggering!
| mattlondon wrote:
| Yeah I wonder about this too.
|
| This time last year (or was it the year before that?) it was
| Snapchat (remember Snapchat? Kids don't) that was going to take
| over the world and be bigger than Apple + Facebook + Google
| combined etc etc. I don't think that worked out really.
|
| I am guessing that investors just pile in wherever the "youth"
| are without paying too much attention to what it really is they
| are investing in... just hoping to get in early on the next big
| thing I suppose
| nopriorarrests wrote:
| >remember Snapchat? Kids don't
|
| And yet, SNAP stock is up YoY.
| dclusin wrote:
| Facebook was able to leverage their popularity with college
| students into a larger platform that had mass appeal with all
| age groups. I don't see why TikTok can't add features and get
| the same results.
| jariel wrote:
| Facebook has network effect, TikTock doesn't really.
|
| Facebook is really centered around 'everyone you might know'
| including friends and family, whereas I doubt parents and
| grandparents will ever go onto TikTok.
|
| Most importantly, TikTok is not basic communications tool,
| it's a specialized communications tool honed on a timely and
| probably faddish trend.
|
| Facebook may or may may not survive, but TikTok will have to
| transform to make it for the long haul.
| snazz wrote:
| Instagram doesn't have the same network effect as Facebook.
| Snapchat does have Quick Add, which shows people you might
| know; it's also a much more communication-driven platform.
|
| TikTok is probably the modern Instagram replacement, not
| the modern Facebook replacement.
| lgl wrote:
| Will most likely branch out into all the other usual
| markets, TikTok chat, TikTok meetings, TikTok Ads, TikTok
| shops, TikTok news, TikTok Pay, etc. Basically another
| slightly different version of the same stuff we're all used
| to with these kinds of social platforms. Still.. >100Bn is
| simultaneously ridiculous, funny and sad imho.
|
| EDIT: valuation makes a bit more sense for the parent
| company seeing as it has a lot of other brands that are
| huge in China and India
| bobthepanda wrote:
| YikYak is another possible path for it to go.
|
| Feel free to invest wherever you want, but personally I don't
| have the stomach for it.
| echelon wrote:
| > YikYak is another possible path for it to go.
|
| People complained about YikYak being anonymous. The problem
| is that YikYak listened to the complaints rather than their
| users.
|
| Every social media company upsets its users at some point.
| Facebook, Twitter, Snapchat, Digg. The moat, platform
| stickiness, and competition shape outcomes.
| coralreef wrote:
| Facebook solved the core problem of real identity on the web.
| Extending outside colleges was a natural progression (first
| to workplaces, then to high schools, then publicly).
|
| TikTok solves the problem of short form video creation /
| entertainment. Will their userbase be interested in creating
| the same type of content in 4-5 years? I think they'll
| struggle the same way Snapchat struggles to convince people
| over 35 to use their app.
| holler wrote:
| > I think they'll struggle the same way Snapchat struggles
| to convince people over 35 to use their app.
|
| Have you used TikTok lately? It's overwhelmed with
| millennial/elder millennial and beyond. I don't see this as
| a problem for them and in fact I think people are jumping
| over to it in droves.
| echelon wrote:
| > elder millennial
|
| The only time I feel old is when other people tell me I'm
| old.
| searchableguy wrote:
| Don't worry. You are still young and rockin'
| surbas wrote:
| ... yeah and Vine.
| wolco wrote:
| and keek..
| inimino wrote:
| TikTok is fun. If you're not on it, it's hard to understand.
| kenhwang wrote:
| Snapchat is fun. If you're not on it, it's hard to
| understand.
| [deleted]
| skookum-skuad wrote:
| X is fun for the next 4 days. If you're not on it, you're
| uncool and don't jump on whatever is popular because it's
| popular.
|
| X =
|
| Email#
|
| IRC#
|
| ICQ
|
| AIM
|
| Yahoo Messenger
|
| Friendster
|
| MSN Messenger
|
| MySpace
|
| Flickr
|
| Orkut
|
| Google Talk
|
| Skype
|
| Google Wave
|
| Facebook
|
| Youtube#
|
| Twitter#
|
| Vimeo#
|
| G+
|
| WhatsApp
|
| Periscope
|
| Vine
|
| Instagram
|
| Snapchat
|
| TikTok
|
| Zoom
|
| # Only exceptions, so far
| xiphias2 wrote:
| I tried it multiple times, but I've always got low-quality-
| video fatigue when after have seen the same dance moves 20
| times by different people for the same music.
|
| With Youtube I can watch conference videos that contain
| genuinely new content forever, but I don't see that happening
| with TikTok. Also it spams my mobile notifications, so I had
| to delete it, even though I don't delete too many apps.
|
| For young people who have their friends on it, it's probably
| fun to see them, but for me I just hope that forced TikTok
| integration won't be the next one on Tinder.
| knackfuss wrote:
| This was my first reaction also but making a quick google
| search it seems that TikTok has 500 million users. That's a
| lot. Doing a pretty simple calculation of a dollar per user per
| day, you arrive quickly at 180 billion dollars of advertising
| monetization a year. It is really just another scale. But yeah,
| maybe i am way off and the valuation is still absurd.
| mynegation wrote:
| Where did you get that "simple calculation" from? If Average
| user is worth to TikTok a dollar per day that means that ad
| buyers are willing to give it to TikTok from their
| advertising and marketing budget. Which means that the
| average user should spend at least few grands each year on
| advertised products and services, which does not seem likely.
|
| Also, this is not how valuations are estimated. 180 billion
| _per year_ is a huge amount (for comparison Apple revenue for
| 2019 is 260B). One applies a revenue multiple that depends on
| the stage of the company and industry but for early booming
| social media site is in the range of 20-40. So the estimate
| of 105-110 probably comes from the range of 3-5 B yearly
| revenue estimate
| bllguo wrote:
| let's not quibble over semantics of "simple"
|
| anyway the valuation clearly must include investor
| perception of their growth trajectory.
| dsmithn wrote:
| I think the more appropriate wording would be "completely
| pulled out of thin air and not relevant calculation"
| nelaboras wrote:
| 180b/0.5 = each user (including inactive ones) worth 1$/day?
| pjc50 wrote:
| $1/user/day is a huge overestimate. Facebook manage a
| fraction of that.
| FanaHOVA wrote:
| 200M DAU so way above 500M users
| vikramkr wrote:
| One dollar per _day_!? That 's an obscenely high level.
| Facebook is one of the highest revenue per user social media
| companies by orders if magnitude and they made worldwide an
| average of 7.26 per user in an entire financial quarter,
| which is like 8 or 9 cents per day. If tiktok is outdoing
| facebook by a full order of magnitude, and has 1/5th the
| users, even with identical growth expectations they'd be
| twice the valuation at like 1.2 trillion dollars. A couple
| billion in revenues plus investor belief in growth potential
| is more than enough to justify a 105 billion dollar valuation
| (nobody said investors can't overvalue companies either, look
| at wework). I dont think they're anywhere near as obscenely
| profitable as making a dollar per day across all
| international users, they're going to be orders of magnitude
| removed from that.
| intro-b wrote:
| I think Twitch could be a valid comparison to TikTok. Both are
| content-focused platforms that draw in audiences from a variety
| of somewhat non-overlapping demographics, but exist in the same
| space. They've already branched out into livestreaming, and I
| think a logical next step would be leaning even heavier into
| Twitch-style community building features while simultaneously
| promoting the app's base of viral social media video content.
| ManoSinkosika wrote:
| after rating drop on google still expensive
| blackearl wrote:
| Do any of these kind of apps ever make money? Or do they just get
| pumped and dumped?
| msrmthehomeless wrote:
| Through video ads. They have a structured that's hard to
| differentiate with user content unless you watch till the end.
| tantalor wrote:
| First glance: seems about right; pretty popular/trendy site
|
| Second glance: oh that's in Bs, not Ms; nevermind!
| proverbialbunny wrote:
| In comparison Disney is valuated at $128B.
| mikeg8 wrote:
| that is a mind blowing comparison. Thanks for highlighting
| FriendlyNormie wrote:
| It's worse than that considering TikTok can easily vanish
| from the face of the earth if just two app reviewers
| working for Apple and Google say No.
| alasano wrote:
| Same reason honey was sold for 4 billion, they have an absolute
| ton of data on their users.
| lessname wrote:
| Maybe something worth mentioning: The ratings on google play [1]
| dropped from 4.5/5 to 1.2/5 because they deleted a video
| criticizing a TikTok user and did not delete a video endorsing
| acid attacks, but it seems like it's mainly ongoing in India. [2]
|
| [1]
| https://play.google.com/store/apps/details?id=com.zhiliaoapp...
|
| [2] https://www.indiatvnews.com/technology/news-tiktok-
| gets-1-st...
| kayhi wrote:
| Feels like Twitter buying Vine and not executing made this
| possible?
| justicezyx wrote:
| This is the parent ByteDance, not TikTok...
| skookum-skuad wrote:
| Zoom, TikTok, .. smh. Viral apps, made who-knows-where, who-
| knows-how, and with unproven security.
|
| Dotcom tulip mania all over again.
|
| No.
|
| Thanks.
| chrischen wrote:
| Social media in the US was always something I thought that
| Chinese companies couldn't penetrate due to cultural differences.
| The fact that they have means so many more US tech businesses are
| potentially at risk, because China's tech sector is extremely
| strong on the software side, even on the open source side (Ant
| design for react, Vue js). This is despite relatively high anti-
| China sentiments: see Koa-router being transferred to a Chinese
| maintainer: https://news.ycombinator.com/item?id=19158218,
| granted there are concerns with transferring a popular package to
| an unknown person for money, or Huawei's problems penetrating US
| market. Companies often have to hide their Chinese origins, such
| as OnePlus (a subsidiary of Oppo).
| layoutIfNeeded wrote:
| >The trading of ByteDance is reflective of the global wave of
| consumers who agree that ByteDance can displace Facebook as the
| leading social network
|
| If this came true, what would be the ramifications for US
| national security?
| DevKoala wrote:
| Facebook security issues were an influencing factor in the past
| elections. How much worse can it get?
|
| I don't think that rooting for Facebook against a Chinese built
| competitor is rooting for national security.
| bko wrote:
| > It's the first salvo of ByteDance's goal to reach 100,000 staff
| globally by the end of the year, outlined by Chief Executive
| Officer Zhang Yiming in an internal memo last month.
|
| Can someone explain to me the rationale behind such an aggressive
| employee headcount? Do they have larger ambitions or are they
| trying to justify the valuation? It just strikes me at an
| incredibly large number of employees for the service.
| gibolt wrote:
| ByteDance has a huge suite of apps already (in China). Several
| of them could independently be unicorns without international
| expansion. I don't see why they wouldn't want to both grow that
| number and expand what they already have to other markets
| novok wrote:
| It's not their only product.
| samename wrote:
| If they employed the moderators instead of contracting them
| out, I think that number would make more sense. I'm not sure if
| they do or not.
| DevKoala wrote:
| I am happy for these news. Facebook has a monopoly on social
| media, and it's good for competitors to grow strong enough to
| challenge it.
| nck4222 wrote:
| In theory that sounds nice but as far as trusting a company
| with my privacy/data, a Chinese backed social network is
| probably one of the only entities I would trust less than
| Facebook.
| TechBro8615 wrote:
| Pretty insane. It will be replaced by another app-du-juor in 4
| years. Social apps follow a pretty predictable schedule where
| cohorts are strongly associated with high school and college
| demographics moving through phases of their lives.
| enitihas wrote:
| What happens if Chinese big tech starts dominating the world?
| Since the US no longer dominates manufacturing, if the US starts
| losing in services too, what advantage will the US ever have on
| China?
| michaelyoshika wrote:
| Soon Tiktok will be banned in the US by an act proposed by FB
| lobbyists.
|
| Smart for them to hire an American CEO, though. But I still
| believe FB has more lobbyists.
|
| Another possible outcome is they will be forced to sold TikTok
| to some holding companies in the US.
| majormajor wrote:
| What's the worst that can happen?
|
| China banning US services seems to have worked out just fine
| for their tech industry, so maybe _more_ countries should do
| that, not fewer.
| jariel wrote:
| This is an excellent question, but more pertinent is the fact
| that these companies are state-sponsored, state-backed.
|
| The CCP/China views these apps as a _serious tool of foreign
| policy_ and economic expansion, influence and control.
|
| Imagine if Trump had meetings with Apple CEO and was
| subsidizing their product, creating worker legislation for
| them, directing/requiring banks to fund them, using the foreign
| service to help cut deals and suppress competitors etc.,
| controlling/censoring everything in the AppStore.
|
| This happens everywhere to some extent but it's very real for
| China.
|
| It would be fine if some 'large, great Chinese companies'
| started doing some great things but that isn't really the case,
| this will be a form of economic dumping, state collusion and
| strategy.
|
| It's a serious issue that 'old economy' Trump is nowhere close
| to understanding.
|
| We don't want to get hyper-nationalist on the other hand, we
| can't afford to ignore the real systematic issues either, and
| only a very firm hand will be able to make a difference. This
| is in a way the paradox of Trump - he's the only US leader,
| arguably through bluster and arrogance - to be able to actually
| stand up to some systematic Chinese intransigence.
| Avicebron wrote:
| That's where we are at. Thankfully modern economic theory has
| the best interest of the US at heart. I'm sure the more we
| offshore the better it will get for all of us here, I mean it
| just makes sense.
| softbankhater wrote:
| Good news. Finally some social network without FB and Google!
| softbankhater wrote:
| OK, it is not really a social network right now, but I suggest
| they will move in that direction.
| jariel wrote:
| Anyone care to comment on the sustainability of these platforms?
|
| Facebook has a strong network grounding effect (a few of them)
| and it may be around for a while.
|
| But these 'hyper short form' things like Snapchat and TikTok I
| feel to be faddish. The 'form' is here to stay, but unless the
| platforms have lock-in they are fickle.
|
| I think Apple, FB, MS, Google have strong incumbency, even though
| Snapchat is growing ... I'm not so sure.
|
| That said - the world is still coming online in droves, and
| Snapchat only has 200M users meaning a lot of upside, and
| possibly an opportunity to entrench themselves.
| snazz wrote:
| I'm not sure that I would put Snapchat and TikTok in the same
| bucket. Snapchat has very strong network effects among a
| certain significant demographic. It has a feature that suggests
| people you may know and a variety of techniques (Streaks, BFFs,
| Snap Score) intended to keep people using it daily. Think of
| Snapchat more like a messaging app than like a social network.
| kgin wrote:
| TikTok proved to be a perfect secret clubhouse for Gen Z
| sensibilities of humor, nihilism, and celebration of differences.
| But as older generations pile on that do not pass the "vibe
| check", it is already slowly starting to ruin the party. It's
| still the best party in town, but hopefully ByteDance is humble
| enough to realize TikTok's success is about a lucky coupling of a
| format and cultural moment.
| Invictus0 wrote:
| I don't necessarily agree with this. I know several people that
| get their daily news through Snapchat. Tiktok rewards viral
| content, unlike Facebook which just blasts everything your
| friends do on the platform into your timeline. I think the
| signal is much higher on tiktok.
| runawaybottle wrote:
| If what you're saying is true, then in a sense a lot of these
| apps are like the Seinfeld of the time. Eventually the season
| finale happens, and very few end up being a Simpsons
| (Facebook).
|
| Profit while you can I guess.
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