The TikTok ban will benefit Meta, Google and Snap the most: Bernstein

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If TikTok is banned in the US, Meta is likely to be the biggest winner, alongside YouTube and Snap, according to research and brokerage firm Bernstein.

Ahead of TikTok CEO Shou Zi Chew’s appearance before Congress on Thursday, the research firm said in a note to customers that if the ByteDance app is banned from the United States, Meta could quickly attract many users and minutes to the app. .

Chew is set to testify before Congress after multiple calls to ban the short video app in the country and pressure the Biden administration’s ByteDance to sell TikTok US or it will be banned.

Users go where they already are. It’s probably Instagram’s Reels, which users are already looking at most short videos outside of TikTok, and Snap’s Spotlight, which offers the highest demographic overlap with TikTok, those should be the big winners,” the note said.

Meta, Google and Snap could see an increase in revenue due to TikTok’s absence, which could likely benefit their stocks as well, Bernstein’s note said. TikTok’s projected revenue in the US was expected to be in the range of $7 billion to $8 billion, the note said.

“Advertisement dollars go where advertisers feel most comfortable with the highest ROI. Meta again seems like the most likely winner with best-in-class ad products, including SFV, while YouTube bids the largest overlap of branded campaign objectives. YouTube was also probably the biggest share TikTok ad donor and be able to watch ad dollars come home,” the note said.

Users go where they already are. It’s probably Instagram Reels and Snap Spotlight that should be the biggest winners. Bernstein

Earlier this week, Chew said Tikok has more than 150 million users in the US. Bernstein estimates that these users collectively spend more than 2.8 trillion minutes per year on the app, putting TikTok second for minutes spent per day per user (52 minutes), just behind Netflix.

In 2020, India banned TikTok due to its Chinese ownership and concerns about the app threatening “the country’s national security and defence”. Soon local apps like ShareChat’s Moj, Times Internet’s MX Takatak (now acquired by ShareChat) and Google-backed VerSe Innovation’s Josh quickly gained a number of TikTok users, international players like Instagram, YouTube and Snap also jumped at the opportunity with short-format videos.

Bernstein noted that it doesn’t see a similar scenario of local TikTok clones emerging in the US

Given recent gestures from the White House, legislators and federal law enforcement agencies, Chew faces a potentially hard turn under the glare of the government’s big, bright lights.

Ahead of his congressional testimony, Chew shared a prepared statement saying that the belief that TikTok is “beholden” to the Chinese government is false.

“…I understand that there are concerns arising from the imprecise belief that TikTok’s corporate structure is beholden to the Chinese government or that it shares information about US users with the Chinese government,” Chew said.

“This is emphatically not true. Let me say this unequivocally: ByteDance is not an agent of China or any other country.”

TikTok has spent more than $1.5 billion on Project Texas, which aims to appease US authorities regarding the security and transparency of the app’s US operations.

The company has also highlighted how the app contributes to the economy, saying that more than 5 million businesses use TikTok. In addition, the app employs more than 7,000 people in the country. A number of creators, along with some Democratic representatives, are siding with TikTok and protesting the potential ban in Washington DC.

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