Revenue 2023: US$ 110,000 billion (€ 101,730 Mrd.)

Overview

ByteDance, founded in 2012 and the world's most valuable private start-up at the beginning of 2020 with a value of around 100 billion dollars, is the operator of TikTok - one of the most successful social media platforms. Founder Zhang Yiming says his goal was to create the first global Chinese internet giant. The first to be able to take on the American tech giants.

General Information

Headquarters
Room 10A, Building No. 48, Zhichun Road
Haidian District
Beijing
China
website: bytedance.com/en  

Branches of trade:  Social media, information services, publishing, AI applications
Legal form: Private company
Founding year: 2012

Basic economic data (in billion US$, estimated)

	2023	2022	2021	2020
Revenue	110.000	80.000	58.000	37.000
Profit	40.000	25.000	14.000	19.000
Employees	160.000	160.000	110.000	100.000

Executives and Directors

Management:

• Liang Rubo, CEO
• Shou Zi Chew, CEO TikTok
  

Board Members:

• Rubo Liang, Chairman of the Board
• Arthur Dantchik, Board Member
• William E. Ford, Board Member
• Philippe Laffont, Board Member
• Neil Shen, Board Member

History

ByteDance Limited, one of the world's most highly valued private startups, was valued at around $100 billion at the beginning of 2020. The company's first product, launched in March 2012 by tech entrepreneur Zhang Yiming in the month of its founding, was an app for sharing short videos, ironic commentary, jokes, and pictures called Neihan Duanzi. The service quickly gained tens of millions of fans among China's mobile internet users. The app's extreme popularity sparked the creation of the so-called "Duanzi community." A dedicated offline code was even created on China's streets: honk once, pause, honk twice.

But ByteDance really rose to prominence in 2012 with its flagship news and information platform Toutiao, also known as Jinri Toutiao ("today's headlines"). The platform's selling point was its ability to generate a tailored news feed for each user based on their usage behavior and interests. Until then, many users got their news from major social media platforms like the microblogging service Sina Weibo or from traditional news portals. Toutiao was a relatively early entrant in China into the field of mobile applications powered by machine learning. The numbers quickly grew; by September 2017, Toutiao had 120 million daily active users, who were provided with news and other content from its more than 100 content categories.

The next big step came in early 2017, when Toutiao invested heavily in a new video-sharing app called Douyin, a word that means "trembling sound" in Chinese. Launched in September 2016 under the name A.me, the app was renamed in December 2016. Its innovation—inspired by predecessors such as the app Musical.ly, launched in 2014—was to be based on 15-second videos that were easy for users to create. Unlike the longer videos found on platforms such as Alibaba's Youku Tudou, Douyin videos offered no play or pause options, but could be viewed instantly when accessed via a convenient Swipeinterface, as used by Musical.ly and other apps like Tinder. Also due to collaborations with Chinese celebrities, Douyin's user base grew tenfold between March and December 2017 alone. In September, ByteDance announced the launch of a global version of its Douyin app under the brand name TikTok. The app was described at the time as a "global competitor to Musical.ly." Shortly thereafter, however, ByteDance acquired Musical.ly for a price between $800 million and $1 billion, facilitating the merger of Musical.ly—which has more than 200 million users in over 30 countries—with TikTok.

The growing popularity of TikTok brought ByteDance, whose activity had previously been limited to just two apps in the Chinese market, significant global attention. At the end of 2017, the trade publication TechCrunch wrote that ByteDance was now "no longer a secret outside of China." Suddenly, the company's actions were being followed by media and investors alike. There was news that ByteDance had entered into a strategic partnership with the Chinese internet company Cheetah Mobile, which invested $50 million in its live-streaming business Live.me and also fully acquired Cheetah Mobile's France-based media aggregation service News Republic for $86 million. There were even reports that ByteDance had tried to buy Reddit, the American Social News Aggregation Site. But ByteDance was rejected because the investors knew too little about the young company from China.

In early 2018, ByteDance's growing popularity was both its greatest strength and a significant weakness. At the end of 2017, for example, the news app Toutiao was taken offline for 24 hours. Internet regulators accused ByteDance of "misleading public opinion," a reference to the principle that the media must comply with the Chinese Communist Party's censorship demands to maintain political stability. Analysts warned that ByteDance faced "a certain degree of uncertainty" in 2018—and they weren't wrong. In the early months of 2018, ByteDance stepped up its internal efforts to control and review content on its platforms to ward off government crackdowns, hiring thousands of "content critics" for the joke app Neihan Duanzi and other services, and pledging to hire at least 10,000 more content critics by the end of 2018. Nevertheless, the scandal ensued. In April 2018, Toutiao faced a three-week suspension for distributing "unauthorized news content." Neihan Duanzi, the humor app that shaped ByteDance's early beginnings, suffered a harsher fate. It was shut down indefinitely by authorities, accused of distributing "vulgar" content.

ByteDance CEO Zhang Yiming issued a public apology via Tencent's messaging platform WeChat, a reminder of the intense political pressure Chinese technology companies face and the need for close coordination with the political leadership. In his apology, Yiming spoke of the need to adhere to the "correct guidance of public opinion": "Jinri Toutiao will shut down his Neihan Duanzi app once and for all," Zhang wrote. "Our product went down the wrong path, and content appeared that was inconsistent with core socialist values, which did not properly implement the guidance of public opinion—and I am personally responsible for the penalties we received." The shutdown of Neihan Duanzi sparked protests by users who circled the state regulator's office building in their cars on April 11, 2018, the day the shutdown was announced, honking their horns—once, pause, twice. Similar protests took place nationwide. Following Zhang Yiming's public apology and three-week suspension, Toutiao relaunched in May 2018 with a "New Era" channel highlighting the "achievements and efforts of socialism with Chinese characteristics."

Despite this political headwind in 2018, ByteDance continued to grow. Its success can be summarised in the two syllables TikTok, which is naturally sensationally popular with young people. Following on from the success of Musical.ly, the video sharing app with its ’self-made Breakdance videos and silly Hashtag challenges(New York Times) a huge fan base worldwide. In October 2018, thanks to the immense success of TikTok and Toutiao, ByteDance surpassed Uber to become the world's most valuable startup. TikTok was downloaded 115 million times in March 2020 alone, not least because the coronavirus epidemic forced countries around the world to implement quarantine and social distancing rules. "As Covid-19 has brought teenagers worldwide out of school and into their rooms, they have turned to TikTok, a trusted digital companion," wrote the Economist. And while companies around the world announced layoffs, ByteDance released an internal memo in April 2020 stating that it planned to create 40,000 new jobs worldwide in 2020. ByteDance reportedly envisions finding a global CEO who understands both Asian and Western markets. However, the IPO, which has been considered for some time, has been postponed for the time being.

As announced in July 2021, ByteDance plans to abolish the "big/small week" overtime policy, or "hated overtime policy," or the "996" schedule (working from 9 a.m. to 9 p.m. for six days), not uncommon among Chinese technology companies. ByteDance's announcement followed competitor Kuaishou's decision to abandon the same policy. A Tencent-owned game studio recently implemented a similar employee-friendly policy, requiring employees to finish work at 6 p.m. every Wednesday and effectively have the weekend off.

One concern for ByteDance was concerns about political censorship and data security, especially in the United States, where Chinese companies are generally under suspicion. In October 2019, US lawmakers called for an investigation into TikTok: They wondered, for example, whether ByteDance, as a Chinese company, could censor content (specifically: personal data of American users) in order to comply with the Chinese government's demands. After the Committee on Foreign Investment in the United States (CFIUS) approached TikTok, the company tried to allay concerns by hiring more US engineers and setting up a new team based in Mountain View. In February 2020, however, the US Transportation Security Administration (TSA) banned its employees from using TikTok due to data security concerns. Donald Trump then even decreed in mid-August 2020 that TikTok was a ‘threat to national security’. He wanted to force the sale of the American activities; Oracle and Walmart had already been named as buyers. His Democratic successor Joe Biden cancelled these plans.

management

Zhang Yiming, born in 1983 in Longyan in the southern Chinese province of Fujian, founded Bytedance in March 2012. In November 2018, he stepped down as CEO of Toutiao, the news aggregator, and Chen Lin, Head of Product Management, became Zhang's successor. According to analysts, Zhang had stepped down from day-to-day operations to focus more on strategic issues at ByteDance. Zhang's vision - to take on American companies such as Facebook and Google - was already well on the way to becoming a reality.

In May 2021, however, Zhang (one of China's most successful entrepreneurs with an estimated net worth of over $16 billion) resigned from his position as CEO. Why? He wrote to his employees: "I lack some of the skills that make an ideal manager," preferring "solitary activities such as surfing the web, reading, listening to music, and daydreaming" (SZ). Co-founder Liang Rubo became the new CEO of Bytedance, and Shou Zi Chew became CEO of TikTok. The SZ continues: "But hardly anyone in China believes that Zhang is quitting because of alleged daydreaming. Rather, political pressure may have been getting to him."

In his internal letter, Zhang admitted that he is not an ideal manager in the traditional sense and enjoys solitude. Compared to managing people, he is more interested in "analyzing organizational and market principles and using these theories to further reduce management work." Zhang said that in his next role, he will focus on long-term strategies, corporate culture, and social responsibility. Employees describe Zhang as a nerdy and genuine personand a thoughtful leader who is easy to talk to. Most ByteDance employees address him by his first name, Yiming. Unlike other Chinese tech giants that have top-down management and hierarchical corporate structures, ByteDance has a relatively flat organisational structure and a democratic culture.

The new CEO Liang Rubo had been working in the background the whole time. He and Zhang met as roommates in college in 2002 and founded ByteDance together ten years later. Liang later led the development of several of the company's apps (Douyin, Lark, Jinri Toutiao) and had been the global head of HR since 2019.

Business Units

The short video app TikTok enables the sharing of 15-second videos. A huge success. TikTok has offices all over the world, including Los Angeles, New York, London, Paris, Berlin, Dubai, Mumbai, Singapore, Jakarta, Seoul, and Tokyo. In addition, the short video app, which is popular in China, Douyin (still ByteDance's core product, with 556.48 million monthly active users in May 2021) and the news aggregation platform Toutiao, also known as Jinri Toutiao (as of December 2020 with 278.6 million monthly active users), which offers a wide range in different formats, including text, images, microblogs and videos.

With Douyin It all began. After its launch in 2016, the app, following the example of Musical.ly (which allowed sharing of 15-second videos), grew through video sharing and social networking, partnering with popular TV shows and celebrities. TikTok is the global version of Douyin. In the first four months of 2020, when lockdowns were imposed worldwide to combat the coronavirus epidemic, hundreds of millions of people downloaded the TikTok app. The app has been called "the only social media platform from a Chinese company that has gained significant traction outside of China."

More products: Xigua Video is one of the most popular video applications in China, with a wide range of short and long videos. Helo: a leading regional social media platform. Lark, currently available in Japan and Singapore, combines a variety of important collaboration tools in a single platform (chat, calendar, content creation, cloud storage). Finally, BytePlus offers platform services based on industry-leading research into new technologies.

Current developments

Consumers will be able to recognise all types of advertising on TikTok in future, said the responsible EU Commissioner Didier Reynders. The European Consumer Organisation BEUC submitted a complaint about the video portal to the EU Commission and the network of national consumer protection authorities in February 2021. Specifically, the consumer advocates criticised, for example, that children and young people were not sufficiently protected from hidden advertising and potentially harmful content. The procedure for processing personal data was also misleading. According to the EU Commission, TikTok has promised that users can report adverts and offers that could urge or entice children to buy goods or services. In addition, paid advertising in videos will be labelled with a new label in future. However, the consumer protection organisation BEUC was not entirely convinced by TikTok's promises.

And as Der Spiegel reported in mid-December 2022, Democratic and Republican MPs want to ban TikTok in the US. American security authorities have been warning for years, as Trump did at the time (although he failed in his attempt to ban Americans from using the app in 2020), that Beijing could use it to collect sensitive data from American customers. Democrats and Republicans agree on this. Republican Senator Marco Rubio commented: ‘This is not about creative videos, but about an app that collects the data of millions of American children and adults every day’. Party colleague Mike Gallagher compares TikTok ‘to a Cold War licence for the Soviet Union to buy up the New York Times and Washington Post newspapers and major TV stations’. According to FBI chief Chris Wray, ‘the Chinese government can use the app to gain control over the data of millions of US citizens’. A statement from Bytedance is not available. China has denied accusations of espionage. Der Spiegel finally: ‘In Germany, Digital Minister Volker Wissing rejected a special law to regulate TikTok in June.’