The entrepreneur who wants to buy TikTok
About 170 million U.S. users could be TikTokless as soon as Jan. 19. Early this month, a federal appeals court upheld a law that could ban the very popular short-form video app unless its Chinese owners agree to sell it.
They have a willing buyer, though, in billionaire Frank McCourt, who has assembled a consortium of investors ready to put down more than $20 billion. He’s the founder of the internet reform initiative Project Liberty. You may also know him as a real estate developer who once owned the Los Angeles Dodgers.
McCourt discussed his motivation for taking on TikTok with Marketplace’s Meghan McCarty Carino. The following is an edited transcript of their conversation.
Frank McCourt: We have our proof of concept, and now it’s a matter of scale. Obviously, 170 million people migrating over to this new platform would actually achieve that scale, and we’d have an alternative internet that we all could choose to use, one that didn’t surveil us and scrape our data. We’re assembling the capital for the bid to be in a position to buy the U.S. platform if ByteDance decides to sell it, and now we’re just waiting to see how the process plays out. January 19 is coming very soon. We’re really at the moment where we’re waiting to see whether or not ByteDance chooses to sell, in which case it could be granted a three-month extension, or whether they just shut the platform down on Jan. 19.
Meghan McCarty Carino: So obviously, there are a lot of moving parts in the legal picture. But what is your pitch to TikTok’s parent company, ByteDance — why should they want to sell to you?
McCourt: Because, quite frankly, we’re one of the only viable buyers. We meet all the criteria: We have the funding, we’re not an antitrust threat, we’ll pass a [Committee on Foreign Investment in the United States] vetting. We are not looking for the algorithm that the Chinese government has made clear that under no circumstances is going to be sold or shared. And very importantly, we have a clean [technology] stack, you know, clean, made-in-America stack to move the 170 million users over to. And it’s very hard to bid on this U.S. TikTok unless you have that stack and are able to live without the algorithm. We’re in a position to do that, and I’m not sure anybody else is.
McCarty Carino: So you are willing to buy TikTok without its algorithm. This has long been considered kind of the secret sauce of the app. What would this new TikTok look like under your ownership consortium?
McCourt: Yeah, it would look and feel to the user very, very similar. However, they would have massively more agency and power. And I know the conventional wisdom is the secret sauce is the algorithm. I think the secret sauce is the 170 million users that have gravitated to TikTok. They’re the ones that create the value, they’re the ones that create the content. Yes, the algorithm is powerful, and getting people quickly addicted to the platform — I’m not sure that it’s healthy, however. And the technology is now advanced enough where people can curate their own algorithm on a large platform, let’s call it TikTok 2.0, where they can get the feed that they’re interested in and the content they’re interested in without being surveilled and having their data scraped and used in ways that they’re not even aware of.
McCarty Carino: What could the role of advertising be? I’ve heard you say that advertising may still be a part of the app.
McCourt: Yeah, the U.S. is a consumer economy, to a large extent, and I don’t see advertising going away anytime soon. And the problem with the current internet architecture is that we are surveilled and microprofiled and then fed ads — and more than ads now, we’re fed news and all kinds of information to manipulate how we think. So [what] we’re advocating for is not an attention economy, not an economy where the, the apps have to be addictive to keep you online so that the advertisers gain your attention. We believe we should evolve to an intention economy, where you and I could go on the internet, express our intention to buy a good or service or engage with something. And that will be very, very valuable, much more valuable to the advertisers to know you and I are a real person with intention, and then be in charge as a consumer. So I think this new version of the internet empowers individuals.
McCarty Carino: Well, tell me a bit more about the alternative. You mentioned you have this proof of concept for a decentralized social media protocol that Project Liberty has built. There is a social media app MeWe with more than a million users that has been built on top of this. How is it going?
McCourt: It’s an open-source protocol we call [Distributed Social Networking Protocol], and we’ve gifted it. Everybody now owns it and can build on it, and many are. We’ve also built a layer one called Frequency, which is an implementation platform to be able to use DSNP. MeWe we did not build. MeWe approached Project Liberty and said, can we be the first to migrate our 20 million user base over to DSNP and Frequency, and by so doing be your proof of concept? But we also believe in what Project Liberty stands for, which is really an internet where we each own and control ourselves. And we made a deal with [MeWe] to move their user base over. So that was the first app. We just had a summit in D.C., just before Thanksgiving, where we announced four more use cases now either being built on DSNP or moving their existing app over to it. So the migration has begun, and we’re now increasing the number of users on the DSNP very rapidly. And what we love about this TikTok opportunity is that we can now, in one full swoop, migrate 170 million users over to upgraded internet, which would catalyze this new internet and really compress time. So this is what’s going on here. And like President-elect Trump, we don’t want to see TikTok banned. We want to see it continue, just on a healthier infrastructure and with a healthier design.
McCarty Carino: So how are you reading the signals now that this bid has been put in motion?
McCourt: Well, we’re waiting to hear — ultimately, ByteDance owns the platform, and they’ll decide whether they shut it down or sell it. So we’re hoping they decide to sell it. We’re not in need of or want of their algorithm. And I see the possibility for a win all around, where the Chinese government could win by not selling their, their algorithm. The U.S. government and the incoming Trump administration could win by not having a ban of TikTok. Existing investors of ByteDance could win by getting some value for the U.S. platform. The American citizens will win by being protected and not be subject to a foreign adversary. And importantly, the 170 million users of TikTok will get a win because the platform that they like and enjoy and use, and many of them are making a living on it, will continue to operate in the U.S. So I think everybody could win here. So I hope ByteDance ultimately decides to sell.
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