According to research and trading firm Bernstein, if TikTok is prohibited in the United States, Meta, YouTube, and Snap will likely benefit the most.
The research company warned clients in a note before TikTok CEO Shou Zi Wei testified before Congress on Thursday that if the ByteDance-owned app is outlawed in the United States, Meta could quickly draw a large user base and increase app usage.
Following several requests to outlaw the short-video app in the nation and pressure from the Biden administration on ByteDance to stop selling TikTok U.S., Chew will testify before Congress. “Users travel to places they are already.
The big winners should be Snap’s Spotlight and Instagram’s Reels, which have the most significant demographic overlap with TikTok and where consumers already view the most short-form videos outside of TikTok, according to the Note.
Due to TikTok’s absence, Meta, Google, and Snap may have an increase in income, which might boost their stocks, according to Bernstein’s research. According to the memo, TikTok’s predicted U.S. income would be $7 billion to $8 billion.
TikTok ban will benefit Meta, Google and Snap the most: Bernstein https://t.co/zWPpHAFiF5
— TechCrunch (@TechCrunch) March 23, 2023
“Advertisers spend their money where there is the most return on investment. With best-in-class ad products like SFV, Meta appears to be the winner, with YouTube providing the most significant overlap of branded campaign objectives. The memo stated that YouTube was probably the most crucial share provider to TikTok ads and might see ad dollars back home.
Chew said earlier this week that TikTok has more than 150 million American users. TikTok is ranked second for minutes spent per day per user (52 minutes) behind Netflix. According to Bernstein’s estimate, these users spend more than 2.8 trillion minutes on the app annually.
India banned TikTok in 2020 due to worries about the app endangering “the national security and defense” of the nation and its Chinese ownership. Eventually, worldwide companies like Instagram, YouTube, and Snap and local players like ShareChat’s Moj, Times Internet’s MX Takatak (bought by ShareChat), and Google-backed VerSe Innovation’s Josh swiftly attracted a bunch of TikTok fans.
According to Bernstein, there won’t be any local TikTok clones developing in the United States.
With recent actions by the White House, politicians, and federal law enforcement organizations, Chew could face a harsh outcome in the government’s spotlight.
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Chew published a prepared statement before testifying before Congress in which he refuted the notion that TikTok is “beholden” to the Chinese government.
I recognize that there are worries based on the false notion that TikTok’s corporate structure makes it subject to the Chinese government or shares user data with the Chinese government, Chew added.
“This is categorically false. Without a doubt, ByteDance does not represent China or any other nation.
Project Texas, which tries to reassure American authorities about the security and openness of the app’s U.S. operations, has cost TikTok more than $1.5 billion.
The company also emphasized TikTok’s economic impact by noting that more than 5 million businesses use it. Also, the app employs around 7,000 workers nationwide. A group of creators and some Democratic lawmakers in Washington, DC, oppose the prospective ban on TikTok.