TikTok has finalised a deal to establish a spin-off version of the app in the US, bringing the year-long legal battle over its ban to an end.
Under the new proposal, called TikTok USDS Joint Venture, three American firms including Larry Ellison’s Oracle, alongside Silver Lake, and MGX, will hold a majority stake – each taking a 15% share. ByteDance, TikTok’s Chinese-based parent company, will retain a 19.9% stake in the company.
The remaining investors include Dell CEO and founder Micahel Dell; Mark Dooley, Managing Director at Susquehanna International Group; and Timothy Dattels is a Senior Advisor to TPG Global, among others.
The announcement comes five years after US President Donald Trump first threatened to ban the social media platform.
Will TikTok’s algorithm continue to be ‘powerful’?
While the deal brings the saga around TikTok’s operations in the US to close, it also raises questions for gaming marketers who “depend on the platform for discovery, community building and player acquisition”, said Mike Craddock, CEO and co-founder of social media agency, NewGen.
iGaming operators have previously utilised the platform to elevate crash game engagement and introduce new titles to their audiences through streaming.
Currently, casinos and sports betting operators are allowed to advertise on TikTok in the US, if they work with a sales representative from the company and follow the guidelines.
But now, questions remain around whether the “very thing that makes TikTok so powerful – its algorithm – will function in the same way under the new deal”, explained Craddock.
More than 200 million people in the US and 7.5 million businesses use the app to discover, create and engage. Under this deal, Joint Venture will retrain, test and update the content recommendation algorithm based on US user data.
This algorithm will be secured in Oracle’s US cloud ecosystem.
The Joint Venture will also have decision-making authority for trust and safety policies, including content moderation. It is to be built on the foundation of the TikTok US Data Security (USDS) organisation and will operate independently.
As the spin-off app gets set up, Craddock believes this is not something marketers should be too worried about as “platform shifts are nothing new”.
“Algorithm updates and evolving feed dynamics are part of the landscape, and the same rulebook applies: stay adaptable, test continuously and build strategies that can flex as platforms change.
“What drives performance today may look very different in a matter of months, so agility will be key. For gaming brands, success on TikTok will continue to come from creative that resonates with communities, not from relying on any single version of the algorithm.”
Adam Presser, who previously was TikTok’s General Manager and Global Head of Operations, will serve as the new CEO.
