The notion that TikTok may be banned from the United States, or sold to a domestic company through a forced divestiture, raises a poignant question: how much is TikTok’s US business worth? While TikTok isn’t a publicly traded company and doesn’t disclose its revenue metrics, selectively-published and (potentially, strategically) leaked figures are helpful in formulating an estimate of the company’s performance across revenue and user base growth:
Note that TikTok’s revenue is not comprised entirely of advertising spend. TikTok offers in-app purchases for coins, which can be used to tip creators and to boost (promote) videos. While this likely represents a small proportion of total revenue, the money generated from boosts could potentially be classified by TikTok as advertising revenue, and it is subject to the 30% platform fee on iOS, per Apple’s App Store guideline update last October.
These numbers, in aggregate, aren’t helpful for estimating the US share of TikTok’s revenue. But comparables can be drawn from Meta and Snap for that purpose using each company’s share of total advertising revenue generated in the United States. Facebook and Snap are banned in China; TikTok, while owned by Chinese-domiciled ByteDance, doesn’t operate in China, where its sister app, Douyin, holds dominion. So while the geographic distribution of users for each app isn’t equivalent, the lack of presence in China doesn’t totally distort the comparison through skew. TikTok also acquired many users from Snap, so it’s not unreasonable to assume that both products have a similar geographic reach.
But Meta and Snap don’t report revenue metrics for the United States. Facebook reports revenue for the United States and Canada, while Snap reports revenue for North America. So deriving the US-based proportion of revenue for each requires adjusting those numbers, as above. To arrive at the US-only estimates, I reduced the North American revenue values according to the weighted GDPs of the country combinations as a proxy for advertising (and in-app purchase) demand.
This range of 44% and 59% seems like a reasonable spectrum upon which to place an estimate of TikTok’s US revenue share — which, if applied to 2022 revenue estimates of $10BN, is between $4.4BN and $5.9BN. Note that the Facebook Blue app saw MAU of 266MM in the United States and Canada in Q4, compared to Snapchat’s 100MM in North America and TikTok’s 150MM in the US. Given the contrast, TikTok’s share of US revenue may be closer to Snap’s than Meta’s, as a result of the lower level of penetration.
