Billionaire US businessman Frank McCourt is creating a fundamental overhaul of TikTok’s business model as part of a plan to bid for the Chinese-owned short-form video app, he told Reuters.
McCourt, who previously owned the Los Angeles Dodgers baseball team, said he has received verbal commitments for $20 billion in financing from a consortium of investors to rescue the app from legal purgatory while he awaits a Supreme Court ruling on determined if he will be forced to sell it. its US operations.
His vision for TikTok includes revamping the company’s advertising model so that users have control over the ads and the type of content they want to see.
Over time, TikTok could earn revenue through e-commerce and licensing data for AI training models — with users’ consent — which will reduce the business’s reliance on advertising.
“When you give permission for your data to be used and you get compensation, that’s a 180-degree change and gives the user the power,” McCourt said this week.
The plan faces several obstacles, including TikTok’s repeated assertions that it cannot be removed from its owner, Chinese tech firm ByteDance.
McCourt said the offer for TikTok would exclude the algorithm that determines the content users see, in order to reduce complications for ByteDance.
The Chinese government in 2020 added content recommendation algorithms to its export control list, requiring a sale or sale of TikTok’s algorithm to go through its administrative licensing procedures.
TikTok’s appeal to the Supreme Court is a last-ditch effort to overturn a law signed by President Biden that seeks to force a sale on national security concerns, or else the app will be banned on January 19.
McCourt said he believes the Supreme Court will uphold the law, after which ByteDance could be open to negotiations. Until then, he’s focused on smoothing the path to a buyout.
McCourt said he and his team have had “preliminary conversations” with members of President-elect Donald Trump’s incoming administration.
Trump tried to ban TikTok in 2020, but has since changed his view, saying on December 16 that he has “a warm place in my heart for TikTok.”
A spokesman for Trump did not respond to a request for comment.
The team is also talking to potential CEO candidates for the new TikTok, McCourt said.
A source familiar with the matter said the team approached V. Pappas, TikTok’s former chief operating officer.
Pappas did not respond to a request for comment. McCourt declined to say who he is talking to about the CEO role.
The plan for TikTok will also include migrating its technology to an open-source protocol developed by Project Liberty, an organization founded by McCourt.
The protocol will allow users to control their data and easily move it elsewhere on the Internet.
The plan is influencing the search for a CEO.
“This is both a big project to scale the technology we’ve built, but it’s also a vision for a better internet. We’re talking to people who share that vision and have the capacity and skills to do both,” McCourt said.
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