Company

Who is ByteDance?

Including TikTok, all of ByteDance’s products have acquired 1.5 billion users in the past 2 years. This is the first time that a company has really troubled Mark Zuckerberg and the first Chinese Internet company to successfully implement a global strategy.

At the end of 2011, Zhang YiMing founded ByteDance in an office near ZhiChun road in Beijing. By August of that year, ByteDance’s first revolutionary App was officially launched.

This app is called “Today’s Headline(or Jinri Toutiao)” and it’s a news client that continuously pushes content to readers through artificial intelligence algorithms. For a long time, its Slogan is “The thing you care about, it’s the headline.” The user simply pulls down the app screen, and the app refreshes eight new user-related content.

Screenshot of today’s headlines

Unlike Facebook’s usage of recommendation algorithms as an aid, today’s headlines are fully driven by recommended algorithms, and users can refresh infinitely. This has a completely different logic from all past news apps, it does not rely on manual editing and social relationships, and only displays content based on the user’s own interests.

According to a report(in Chinese) by Xinhuanet in May 2018, Today’s Headlines have more than 240 million active users in China.

The app was so successful that, for a long time, Today’s Headlines became synonymous with ByteDance. The media, users and even government departments will call this company ” Today’s Headlines”.

Companie driven by recommended algorithms

Although for a long time, ByteDance’s business is dominated by Today’s Headlines. However, ByteDance’s ambition does not stop there.

Today’s Headlines is not the first product released by ByteDance. In March 2012, shortly after the company was founded, ByteDance released an app “Connotation Joke” based on funny content. Before being banned by the government in 2017, the connotation segment had more than 200 million registered users.

List of products directly owned by ByteDance

Name Release/acquire date Introduction User number
Connotation joke 2012.3 Humorous content App, like 9gag.
Today’s headlines(TopBuzz) 2012.8 China’s top news App 240M DAU
Huoshan Live(Vigo Video) 2016.4 WebLive 106M DAU
XiGua Video 2016.5 A Netflix like app. 50M DAU
DouYin(TikTok) 2016.9 Video version of Instagram. 302M+188M DAU
DFIC 2016.8 provider of stock photography, like Shutterstock
Flipagram 2017.2 Music video social app
WuKong 2017.6 a china version of quora
News Republic 2017.11 news App
sortime 2018.4 A calendar and GTD tool.
gogokid 2018.6 Online Education Service using artificial intelligence technology.
Pipixia 2018.6 Inherit from Connotation joke. 5.5M DAU
Helo 2018.6 An Indian version of TopBuzz
Know car king 2018.7 Automotive Media + sales platform 4M DAU
NewGrass 2018.10 Social ecommerce app, a China version of poshmark.
Lark 2019.8 Office collaboration tool
DuoShine 2019.1 Chat tool based on TikTok, like Facebook messenger. 2M DAU
FlyChat 2019.5 Another Chat tool
HuPu 2019.6 Sports portal, like a website-only ESPN 9.2M DAU
Hudong 2019.10 A China version of Wikipedia

Including TikTok, Connotation joke, and Today’s Headlines, ByteDance has so far launched 12 apps and invested in 57 companies. According to data released by ByteDance in July 2019, its apps has more than 700 million active users and 1.5 billion monthly active users worldwide.

Most of ByteDance’s products use recommended algorithms to drive content or services in a particular interest domain. But some analysts believe that ByteDance’s product matrix itself is like a product driven by a recommendation algorithm.

Today’s Headlines often replaces the bottom buttons with very different features, and if they attract enough users, they have a chance to become a new App.

Through the interaction between apps, the product group allows users to flow between different types of product forms and content until the user finds the app that he wants most. Users may spend more than 2 hours of screen time per day in this final selection.

If the user can’t stay in any of these apps, ByteDance will try to open up a new feature in the existing app to satisfy the user. If this feature attracts enough user screen time, it will gradually evolve into a new independent app.

ByteDance relied on this strategy to successfully incubate its three online video services, in addition to the well-known TikTok, there are two products, Melon Video (Xigua Shipin) and Volcano Live(Huoshan Zhibo). Although the three products are all “online video services,” there are differences in product form and content presentation.

TikTok, Xigua, Huoshan screenshots

TikTok is positioned as a video version of Instagram, Xigua Video is similar to Hulu or Netflix, and Huoshan Live is more like a Youtube, but all in Chinese version. ByteDance did not design these apps according to the original competitors, but by constantly improving the experience of the corresponding features in Today’s Headlines until they were stripped.

At the moment, ByteDance also replicates their development models in social, office tools, and online finance. It launched Lark, mocker of Slack, similar to Facebook’s Duoshine, and acquired Mubu’s Chinese version of WorkFlowy and online document tool Shimo. Registered MeFirst Loan and Chestnut Loan trademark (service not yet released). ByteDance also began to strengthen its investment in the search business to challenge Baidu in today’s headline app.

This strategy not only makes it successful but also exposes it to fierce competition.

Fierce competition with the entire industry

The ByteDance strategy has shaken the Chinese Internet industry’s 20-year monopoly by Baidu, Alibaba, and Tencent, known as BAT.

After Baidu, Alibaba, and Tencent have gained a foothold in the Chinese Internet industry, China’s newly emerging Internet companies (such as food delivery company Ele.me, online taxi company Didi, etc.) have often chosen Baidu and Alibaba or Tencent’s interests tied.

As ByteDance began to compete with the three giant Internet companies, the company fought the entire Chinese Internet industry.

In this process, the most tragic is the competition with Tencent.

In March 2018, Tencent banned the spread of TikTok on WeChat, a communications app with 1 billion users in China, which is almost the only tool for Chinese to connect with each other via the Internet.

In the beginning, WeChat claimed that it was because the government regulatory requirements blocked access to all video sites, but then the other sites were unblocked with only TikTok still.

WeChat claims that some users who use WeChat social login to TikTok found that friends on WeChat appeared in the “Recommended Friends” column of TikTok. According to this, ByteDance adopts an unauthorized method to obtain the friend relationship network on the WeChat. WeChat has a social login SDK similar to Facebook, but in general, WeChat does not authorize third-party applications to read the user’s friendship on WeChat.

After the ban is in effect, WeChat users cannot open the TikTok URL in WeChat’s built-in browser. If the user wants to share a TikTok video, they need to copy the URL from the WeChat window to the system browser to view it. Or the user can download the video source file from TikTok and send it to his WeChat friends as a simple video file.

Also see: You shall not share:how Internet corporations block competitors in China

ByteDance denied the accusation and thought it was the reason Tencent created for unfair business competition.

On May 30, 2018, Today’s Headlines pushed an article titled “How many regulators can stop Tencent,” which criticized the game industry is injury to Chinese minors in the tone of Chinese official media. However, the court decision afterward indicated that Tencent was not mentioned in this article, and the article itself was not released by any official Chinese media.

As a counterattack, Tencent stopped advertising in the products of ByteDance. Previously, Today’s Headlines and TikTok have become important distribution channels for Chinese mobile games, while Tencent’s main revenue comes from mobile games.

On January 23, 2019, WeChat unilaterally disconnected the social login of TikTok, and users who use WeChat social login to TikTok will not be able to access their Tiktok accounts. This is because ByteDance released its own chat app, Doshine, on January 15, 2019, and hopes to replace WeChat.

WeChat claims that ByteDance forwarded the WeChat social login information obtained by TikTok to Doshine, which directly violates the WeChat developer agreement. The agreement requires that each third-party app needs to independently request WeChat social login, even from the same company. And WeChat will not provide social logins for competitors who are precisely the same as themselves.

In April 2019, Chinese search engine giant Baidu sued ByteDance, accusing the latter of copying Baidu’s original content in its new online search business. As a counterattack, ByteDance accused Baidu of unauthorizedly crawling a large number of TikTok videos in its app “Simple Search.”

In March 2018, TikTok launched its e-commerce function. Video producers can instantly insert product links in short videos and live broadcasts, making ByteDance a potential competitor for Alibaba. But until now, there has not been a direct conflict between the two.

ByteDance does not always win from these competitions. In June 2017, ByteDance split the question and answer function from Today’s headlines into a separate Goku app. This move was strongly resisted by another Chinese question and answer website Zhihu. A large number of authors chose to stay in Zhihu, which had been running for eight years, rejecting ByteDance’s cash reward program for authors.

A year later, it was reported that the ByteDance had transferred more than 100 employees in charge of Wukong to other businesses, and Wukong was once again a function of Today’s Headlines.

It is undeniable that ByteDance’s business strategy does give the company the ability to shake the Chinese and even the world’s Internet industry, but the future is still not good.

Supervision and Speech Camellia Pressure

Competition is not the only problem that ByteDance needs to worry about.

“Today’s Headlines” is the earliest and most successful business of ByteDance, a product related to news and media. This has caused ByteDance to face regulatory pressure from the Chinese government.

Zhang stands before the ByteDance Building in Beijing. Picture credit: The Information

In 2016, ByteDance founder Zhang Yiming said in an interview with Caijing Magazine: “The media must have values. It must educate people and export ideas. We don’t advocate this. Because we are not media, we are more concerned with the throughput of information. The amount and diversity of information. At the same time, we really should not be involved in (values) disputes, I do not have this ability.”

This dialogue was widely understood in the following dissemination as “the algorithm should not have values” and angered the Chinese government.

In 2017, with more than 100 million daily active users on Today’s Headlines, this app had become the most important agenda-setting tool. Unsurprisingly, criticism, and regulatory policies have followed.

Since September 2017, People’s Daily has published continuous comments on the recommended algorithms for ByteDance’s various products, questioning whether “the proliferation of pornography and violence by algorithms is also a neutral part?”

On December 29, 2017, Beijing Netcom Office ordered ByteDance to stop updating the Today’s Headlines’s homepage for 24 hours.

On March 29, 2018, CCTV’s “Economic Half-hour” exposed Today’s headlines to publish illegal advertisements and scam ads.

On March 31, 2018, Huoshan Live was exposed to videos and live broadcasts that encouraged youth to become pregnant.

On April 4, 2018, the State Administration of Radio and Television ordered ByteDance to permanently shut down its six-year-old app Connotation Joke, because of a large amount of racial discrimination, sexism, geographical discrimination, as well as pornographic, bloody, violent and political rumors.

This is the first time in recent years that the Chinese government has directly required companies to permanently close their businesses, rather than achieving compliance through rectification as usual.

On April 11, 2018, Zhang Yiming published an open letter “Apologize and Introspection.” In the letter, Zhang Yiming apologized to the government, colleagues, users, and the public on behalf of ByteDance, and admitted that ByteDance was too biased towards technical determinism, ignoring the negative effects that technology may bring.

After that, ByteDance reiterated that its company name is called “ByteDance” instead of “Today’s headline”, and at the same time, modified the Slogan of today’s headlines, from “you care about headlines” to “information creates value.”

ByteDance also no longer publishes the number of daily active users of today’s headlines to hide their actual influence.

But these moves did not end the debate.

An advertising accident

In July 2018, ByteDance made a serious mistake in its TikTok promotional ads on other sites. The mistake linked the keyword Qiu Shaoyun, a well-known soldier who died in the fire during the War of Resistance Against Japan, to the barbecue-related video. The accident has caused some ordinary Chinese netizens to join the attack on ByteDance, making ByteDance’s situation in China more and more similar to Facebook’s face in the United States.

ByteDance’s internationalization strategy is to some extent serve the risk dispersion. Doing business outside of China can avoid the harm caused by the recurrence of a tragedy like the Connotation joke.

But what ByteDance didn’t expect was that TikTok would face the same problem in the US and Europe sooner or later as a product closely related to culture and entertainment.

That’s why TikTok met Mark Zuckerberg, Chuck Schumer, and Tom Cotton.

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