TikTok’s parent company reports a revenue jump of 111%
In an internal memo to staff, ByteDance, the company behind the hit social media video platform TikTok, showed revenue had increased to $34.3 billion in 2020. The figure highlights the continuing popularity of the platform.
The gross profit for the period amounted to $19 billion, an increase of 93%. However, due to a one-off accounting adjustment, a net loss of $45 billion was recorded for the same period. ByteDance said the adjustment was not related to the company’s operations.
The memo also reported that as of December 2020, ByteDance had a base of around 1.9 billion active monthly users across all its platforms.
TikTok under pressure
The figures come as several Chinese technology giants, including ByteDance, have come under increasing pressure from governments around the world.
The increasing popularity of TikTok has brought it under scrutiny from governments including the US. Last week, Reuters reported that President Joe Biden signed an executive order forcing many Chinese apps into taking tougher steps to protect user’s data if they wanted to continue operating in the US market.
This step comes in the wake of the President revoking an executive order that his predecessor Donald Trump had issued. This order banned Chinese apps TikTok and WeChat from the US market. Due to legal challenges, the ban had never come into force.
The US Department of Commerce has said that instead of an outright ban, it will now review apps that are designed and developed in the jurisdiction of a foreign adversary. President Biden said that the department would use an evidence-based approach to identify if such apps pose a threat to national security.
Officials and politicians within the government had raised concerns about users’ personal data being handed to Beijing. TikTok has always vehemently denied the allegations.
Home scrutiny
As well as being under pressure from foreign governments, the company is also under pressure on the home front. Chinese regulators have recently toughened their stance on tech giants, including 13 online platforms. It comes as part of a wider effort to rein in a sector seen as becoming too powerful.
Chinese authorities said that the clampdown was designed to “prevent monopolistic behavior and the disorderly expansion of capital.”
This stance is at odds with the Chinese Government’s previous “hands-off” approach to the tech sector. The limited regulations the sector had to adhere to had been designed to allow the technology industry to grow.
Managerial shake-up
Internally, the company is also changing management. Earlier this year ByteDance announced that the company’s co-founder and CEO, Zhang Yiming, would step down by the end of the year.
Fellow co-founder Rubo Liang has been named as Mr. Zhang’s successor.
In a message on the ByteDance website, Zhang Yiming said – “The truth is, I lack some of the skills that make an ideal manager. I’m more interested in analyzing organizational and market principles, and leveraging these theories to further reduce management work, rather than actually managing people.”
Mr. Zhang has been at the helm of the company since it was founded, and this move marks the biggest shake-up in its ten-year history.
