TikTok's US Ban: A Dark Day for Users and Revenue

As the clock strikes midnight on January 19, 2025, millions of TikTok users in the United States will likely face a grim reality: the app they've grown to love may no longer be accessible. The impending ban, passed by Congress last April, gives TikTok until this date to either divest from its Chinese parent company, ByteDance, or face a nationwide ban. With the Supreme Court's decision not to intervene, TikTok's future in the US hangs in the balance.

The ban's short-term impacts on TikTok's user base and revenue are expected to be significant. Existing users may lose access to the app, leading to a substantial drop in active users. Some users may attempt to access the app using VPNs or alternative channels, but this comes with risks such as downloading malicious software. Additionally, users may switch to alternative apps, leading to a temporary increase in their user base.

TikTok's advertising revenue is also likely to plummet due to the loss of US users. The app's advertising revenue in the US is expected to reach $1.1 billion this year, according to Insider Intelligence. With the ban in effect, TikTok may face difficulties in maintaining its US-based workforce, leading to potential layoffs and increased costs.



In the long term, TikTok's user base and revenue may recover if the ban is lifted or the company finds a way to operate in the US. However, it could take time to rebuild trust and reach previous levels of engagement. The ban could also lead to a backlash against the US government, with users seeking out alternative Chinese apps, potentially increasing their user base.

TikTok's main concerns for US officials revolve around national security and the potential for the Chinese government to use the app as a vehicle to spy on Americans or covertly influence the U.S. public. To address these concerns, Congress passed the "Protecting Americans from Foreign Adversary Controlled Applications Act," which gives TikTok until January 19 to either divest from ByteDance or face a ban in the US.

Project Texas, an initiative by TikTok to safeguard American users' data on servers in the US, was not enough to appease U.S. concerns about TikTok. The Justice Department said the plan was insufficient because it still allowed some U.S. data to flow to China. This highlights the challenge of separating a U.S. subsidiary from its foreign parent company, as TikTok's data infrastructure is deeply intertwined with ByteDance's.

If the ban goes into effect, TikTok could become unusable for U.S. users in several ways. The app could be removed from app stores, making it unavailable for new downloads. Existing downloads may become buggy and eventually nonfunctional as updates are no longer provided. TikTok could also choose to shut off its app for U.S. users entirely, directing them to a website with information about the ban. Users may try to use VPNs to access the app, but this could come with risks such as downloading malware or spyware. Additionally, users may seek out alternative apps, leading to a surge in popularity for TikTok copycats like RedNote, Lemon8, Clapper, Flip, and Fanbase.

TikTok's Plan B remains unclear, as the company has not publicly announced any alternative strategies. However, it is banking on Donald Trump to save them in a last-ditch effort that will likely come with strings attached. Politically, TikTok misplayed its hand at every turn of this multi-year saga by repeatedly dismissing the possibility of a ban and being blindsided by Congress overwhelmingly agreeing on a ban. The company also lost on appeal to the Supreme Court with only a day left before the law goes into effect.

The ban on TikTok in the US could have significant implications for TikTok's global operations and its parent company, ByteDance. The U.S. is one of TikTok's largest markets, with over 170 million monthly active users. A ban would result in a significant loss of revenue and user base for the company. This could also lead to a decrease in TikTok's global influence and reach. ByteDance's valuation is heavily tied to TikTok's success, and a ban in the U.S. could lead to a decrease in ByteDance's overall valuation, as investors may become more cautious about the company's future prospects. If the U.S. ban is successful, other countries may follow suit, leading to a further reduction in TikTok's global user base and revenue. This could include countries like India, which previously banned TikTok due to similar national security concerns. The ban could also damage TikTok's and ByteDance's reputation globally, making it more difficult for ByteDance to expand into new markets or maintain its existing presence. If the ban goes into effect, ByteDance may be forced to sell TikTok's U.S. operations to comply with the law, leading to a fire sale with ByteDance being forced to accept a lower price than it would have otherwise. Alternatively, ByteDance may choose to shut down TikTok's U.S. operations entirely, further impacting its global operations. A significant loss in revenue from TikTok could impact ByteDance's other businesses, such as Douyin (TikTok's Chinese counterpart) and other apps under the ByteDance umbrella, leading to a reduction in investment and growth opportunities for these businesses.

In conclusion, the ban on TikTok in the US could have far-reaching consequences for TikTok's global operations and ByteDance's overall valuation and reputation. The company may need to adapt its strategies and find new ways to generate revenue and maintain its global presence in the face of these challenges. As the clock ticks down to January 19, TikTok users and investors alike await the outcome of this high-stakes game of political brinkmanship.