TikTok’s potential ban in U.S. could be boon for Meta and Snap
Investors in $Meta Platforms (META.US)$ , $Snap Inc (SNAP.US)$ and other U.S. digital media companies have been looking for signs of a rebound after a tumultuous 2022. They got some unexpectedly optimistic news this week.
The U.S. House Foreign Affairs Committee on Wednesday voted to advance legislation that would give President Joe Biden the authority to ban TikTok, the viral video app owned by China’s ByteDance that’s been swiping market share from social media stalwarts.
“Implications are great for anybody that has been losing market share to TikTok,” said Laura Martin, an analyst at Needham, in an interview. She said Snap, Meta’s Facebook and $Alphabet-A (GOOGL.US)$ YouTube could be “huge beneficiaries” if the ban ultimately takes place.TikTok has been on a meteoric rise in the U.S., and its impact was particularly noticeable in 2022, as a sputtering economy pulled down the online ad market.
In 2021, TikTok topped a billion monthly users. An August Pew Research Center survey found that 67% of teens in the U.S. use TikTok, and 16% said they are on it almost constantly. According to Insider Intelligence, TikTok controls 2.3% of the worldwide digital ad market, putting it behind only Google (including YouTube), Facebook (including Instagram), $Amazon (AMZN.US)$ and $Alibaba (BABA.US)$
The U.S. House Foreign Affairs Committee on Wednesday voted to advance legislation that would give President Joe Biden the authority to ban TikTok, the viral video app owned by China’s ByteDance that’s been swiping market share from social media stalwarts.
“Implications are great for anybody that has been losing market share to TikTok,” said Laura Martin, an analyst at Needham, in an interview. She said Snap, Meta’s Facebook and $Alphabet-A (GOOGL.US)$ YouTube could be “huge beneficiaries” if the ban ultimately takes place.TikTok has been on a meteoric rise in the U.S., and its impact was particularly noticeable in 2022, as a sputtering economy pulled down the online ad market.
In 2021, TikTok topped a billion monthly users. An August Pew Research Center survey found that 67% of teens in the U.S. use TikTok, and 16% said they are on it almost constantly. According to Insider Intelligence, TikTok controls 2.3% of the worldwide digital ad market, putting it behind only Google (including YouTube), Facebook (including Instagram), $Amazon (AMZN.US)$ and $Alibaba (BABA.US)$
Andrew Boone, an analyst at JMP, said Meta likely stands to benefit the most should TikTok face a U.S. ban. Facebook has been pumping money into its TikTok rival, Reels, which has yet to establish a revenue model that's as effective as the core newsfeed.![]()
Meta said during its fourth-quarter earnings call that it expects Reels to become revenue neutral by the end of the year or in early 2024. Video plays on Facebook and Instagram more than doubled within the past year.
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