TikTok’s Next Big Move? To Become Facebook

By Chris Stokel-Walker

The email hit staff inboxes on a Tuesday in early November. With it came a significant change to ByteDance, the Chinese company behind the hit app TikTok and its domestic counterpart, Douyin. An organization famous for its flat hierarchy—any employee, regardless of their standing, has long been able to direct-message founder Zhang Yiming on Lark, ByteDance’s version of Slack—was starting to build silos and more formal structures for its business.

Six new units, it was announced, were being established within ByteDance, covering the Chinese and international versions of its short-form video apps; an online learning arm; Lark, its workplace collaboration tool; Nuverse, its game development unit; and BytePlus, a business-to-business enterprise unit selling white-labeled versions of ByteDance’s proprietary algorithms. Until the reorganization, individual units sat in a hodge-podge business structure with confused lines of reporting.

The question ByteDance employees who received the email may have asked is why the restructuring is happening—and why now? The company is expected to post healthy revenue growth of 60 percent this year, despite a challenging year of regulatory intervention at home and abroad. TikTok recently crossed 1 billion users outside China, and the company continues to ride high.

Only those who steered the company’s new direction have the precise answer. But perhaps the reasons can be found in ByteDance's ambitions to be known for more than its video-sharing services—it wants to be as irreplaceable to internet users in the future as Facebook has become now.

TikTok was the first non-Facebook app to cross 3 billion downloads worldwide, and more than one in four Brits and one in three Americans are estimated to use it every single month. But it’s just one part of ByteDance’s business—and its grip on us could just be the beginning. Though few people realize it, the parent company behind the all-conquering short-form video app is a behemoth with eyes on capturing our attention at work, at school, while we listen to music, and while we play games.

“TikTok is just one part of ByteDance, and while it has potential, it’s not currently contributing much in terms of revenue,” says one former ByteDance employee, who left the company earlier this year and asked for anonymity because of non-disclosure agreements. Instead, ByteDance has a loftier goal: to simultaneously build up TikTok’s revenue-generating capabilities, while using its success in Western markets as a launchpad for its broader suite of apps and services. “They’re trying to become a westernized Tencent or Alibaba,” says Fabian Ouwehand, cofounder of creator management company Many, which was recently bought by Home Shopping Europe. Through Many and Ouwehand’s other company Uplab, he has worked extensively with TikTok and Douyin, the Chinese version of the app. Since ByteDance’s inception, Zhang, the founder, wanted it to be perceived more as a Western company than a Chinese one, according to Ouwehand. And while most of their investments and reorganizations remain based in China, Ouwehand believes the bigger plan is to go global. A ByteDance spokesperson says the company is “constantly looking to develop new and innovative offerings” that follow the company’s ethos.