TikTok owner ByteDance denies report of profit surge in 2023, prepares to launch Instagram rival

ByteDance, the owner of short video app TikTok and its Chinese version Douyin, has denied a news report saying the company’s profits jumped 60 per cent last year, as it plans two new apps – one to rival Instagram and another targeting European users – amid political headwinds against TikTok in the United States.

As a private company, ByteDance is not obliged to disclose its financial conditions, but such data are closely sought-after by investors, who regard the fiscal health of China’s largest unicorn as a bellwether of the performance of the country’s internet industry.

ByteDance’s revenue in the first three quarters of 2023 rose 40 per cent to more than US$84 billion, according to a report in March by tech news site The Information. ByteDance did not comment on those numbers.

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Protests at US Congress after House passes bill that could potentially ban TikTok nationwide

Protests at US Congress after House passes bill that could potentially ban TikTok nationwide

Meanwhile, the online entertainment giant is readying at least two new apps for the overseas market, as pressure on TikTok ramps up in the US, where the House of Representatives last month approved a bill demanding that ByteDance divest TikTok or face a ban. That bill is now headed to the Senate.

TikTok’s official website has launched a preliminary page for the “TikTok Notes” app, which posted three photos and had an “open app” button that did not work as of Thursday.

Although the webpage did not provide much information, TikTok has been sending pop-up notifications to users about “a new app for photo posts”, according to screenshots on social media.

ByteDance is also working on a “coin app” project targeting some European countries including Spain and France, according to a report on Wednesday by The Information.

The new app would follow the business model of Douyin Lite, a version of the main Douyin app that takes up less memory and rewards users for watching videos or bringing in new registered users.

While TikTok has not said which markets TikTok Notes will operate in, one of the influencers who shared a screenshot of the alert is based in the US.

Can ByteDance have its TikTok cake and eat it too?

The launch of TikTok Notes in the US would mark another head-to-head match-up between ByteDance and Meta Platforms’ Instagram, which rolled out its TikTok-like short-video feature Reels in 2020.

Despite its popularity, TikTok is under intense competitive pressure. Nearly 94 per cent of TikTok users in the US also opened YouTube in the past 90 days, while 80 per cent used Instagram and 68 per cent browsed Facebook, according to a report by market intelligence firm Sensor Tower in March.

“Google and Meta would be poised to seize advertiser demand for short-form video placements, given each has a viable short-form video alternative in Shorts and Reels, respectively,” said Abraham Yousef, senior insights analyst at Sensor Tower.