The future of Tiktok in the United States remains uncertain. The company’s unresolved position now relies on US government actions, which has influenced Morningstar’s social media coverage. Bytedance, the company’s owner, is facing a June 19 deadline to sell the social media company’s US assets.
Tiktok has achieved a significant scale and operates in the fiercely competitive US short video market where features for core users are largely converging among social media players. Because the functionality is roughly the same, we believe that the major competitive battlefields to maintain or capture user engagement, and the billions of US ad sales are algorithmic content recommendations, content personalization, and ad monetization.
One of the key battlefields of social media is content recommendation and personalization. The main differentiator of Tiktok is a highly effective content recommendation algorithm, often cited as crown jewels.
The company’s ability to deliver superhumanized content based on subtle signals of interest rather than primarily relying on users’ social connections, has helped to spearhead user engagement. The “For You” page proposes content based on monitoring times, interactions, and even small queues such as rewinds and pauses, making all scrolling important for data collection.
This over-personalized content recommendation is an area where time spent on Tiktok continues to rank among top social media platforms despite investments in content recommendation algorithms by well-capitalized players such as meta and alphabet.
Against this backdrop, the company has accumulated a formidable share of the social media advertising market. With over 110 million active users and over $12 billion in US advertising revenue in 2024, it has rapidly evolved from a small number of startups to top social media companies under our report.
Is there a forced sale in the US Tiktok?
US government concerns about data security and potential Chinese impacts have escalated over time. These concerns and aggressive government efforts to curb the existence of Tiktok were signed in April 2024 to mandate that Tiktok’s US operations be sold or that it faces a state ban on blankets. After a series of legal challenges, the court upheld the ban and ultimately extended the deadline for the sale on June 19, 2025, following an executive order by Trump.
Our basic case is that Tiktok will change its ownership one day in 2025, with the majority of shares being sold to non-Chinese companies to comply with US law. This long term of uncertainty is expected to conservatively benefit competitors as a change in advertising dollars and user attention. I think it’s very unlikely to reach the deal before the June 19 deadline, and I think President Donald Trump will offer another extension after he has already given the two.
Tiktok’s US business has over 110 million active users each month, reporting over $12 billion in advertising sales in 2024. We looked at price/sales multiples across social media coverage and reached this number using a sales estimate of $18 billion and above average multiples for 2026 (in light of its strong growth outlook).
Due to China’s export restrictions, we do not believe that Tiktok’s original “secret sauce” algorithm will be included in the sale. To illustrate this, we applied a discount to our ratings. It also means that new owners will likely need to rebuild or significantly adapt US-based algorithms. This is a major challenge.
The nature of the buyer that is important for investors
Tiktok has accumulated a formidable share of the social media advertising market and is rapidly evolving from a small startup to a top competitor of social media companies under our report. The app’s ultra-personalized algorithms, the creator ecosystem, and shops (including US GMVs over $9 billion) increased ad sales and increased ad sales at 100% CAGR from 2020 to 2024.
The company expects to gain more market share in advertising, with advertising revenue forecasting to grow at a CAGR of 19% over the next five years, well above the 10%-12% of the digital advertising industry.
Strategic acquirers with existing ad technology or e-commerce strengths (e.g., Amazon AMZN or Applovin App) can strengthen competition, turbocharge Tiktok’s US growth, potentially throttle incumbents such as Meta Platforms Meta and YouTube. Conversely, financial buyers or those with a lack of expertise in deep ad tech could lead to a more important digital ad wallet sharing shift towards these established players.
This takes a closer look at the companies where you can purchase Tik Tok. This introduces the most Rikei winners and the meaning of such a deal.
Can Microsoft or Amazon buy Tiktok?
There are many potential suitors, but capitalized players are often seen as they are positioned strongly to acquire Tiktok’s US operations, such as Microsoft MSFT and Amazon.
Oracle Orcl appeared as the top bidder, primarily due to his close personal relationship with Larry Ellison and Trump. However, we believe that the possibility of Oracle’s offer will result in a consortium bid. This is because the company doesn’t have enough financial firepower to close around $50 billion in transactions.
Microsoft
Microsoft expressed interest in pursuing Tiktok in early 2025. Trump confirmed the company’s involvement, but certain terms and conditions were not made public.
Microsoft’s first bid for Tiktok was in 2020. Like Tiktok’s core algorithms, it was rumoured to be between $20 billion and $30 billion for control of operations. This bid was rejected. The company is reportedly in talks with Tiktok again, and will likely be a strong competitor given that it is probably the most financially located to absorb transactions of this size. Additionally, Microsoft is preparing AdTech bases via Xbox, Bing and LinkedIn.
Amazon
Amazon submitted a last-minute bid to acquire Tiktok’s US business in April. The proposed bid structure has not been revealed.
Amazon has a lot of financial resources and consumer expertise from its large e-commerce platform and Twitch. The two businesses have several relationships to enable Tiktok users to purchase Amazon products directly from the app in 2024. Strong strategic compatibility will benefit both platforms, but companies may have to overcome some regulatory hurdles.
Oracle
The purpose of the transaction, called Project Texas 2.0, is to relocate Texas’ American User Data Server and Oracle oversees security. Oracle acquires minority stakes in its US business, and the ordinance holds some ownership.
The market now ranks Oracle as the best bidder. This is based on reports that the company is already in high consultation with other bidders and has stronger political ties with the Trump administration. However, Oracle’s financial position lies at a meaningful disadvantage for Microsoft and Amazon’s financial position. They have a net debt position and have far less free cash flow to cooperate. We believe that any potential offer from Oracle must be a consortium bid.
Applovin
Applovin has submitted a preliminary bid to acquire Tiktok’s business outside of China and is proposing a merger rather than a full-fledged acquisition. This structure includes maintaining minority stakes and maintaining operational control to help Applovin address US security concerns.
Applovin’s CEO believes the transaction is recognized as a “long shot” and the merger will face regulatory hurdles. The financial support and scale of the bids are also uncertain.
Could Tiktok face bans?
We believe that a complete tiktok ban in the US is a low-probability event, but it shows the most important possibility for social media coverage. If the app is banned, YouTube (Alphabet Gog) and Instagram (META) are seen as key beneficiaries in terms of ad transition, earning 75% of the remaining ad dollars.
From an evaluation perspective, we consider the extra ticoku ad dollars meaningless given these companies’ large advertising businesses. You can see an estimate of 1% fair value for Alphabet and a 5% upside for Meta in the case of the prohibition. SNAP SNAP stands to acquire the most important relative valuation uplift and, in the case of a Tiktok ban, it will be upside down by about 20% on our fair value estimate.
You can see a rating of about 5% for Reddit RDDT and Pinterest Pins. Because its product is not well matched with Tiktok’s short form video platform. We also look forward to advertisers’ migration to these platforms.
Limbo’s condition
The third potential scenario is long-term uncertainty without selling by the end of the year. This could gradually erode Tiktok’s US advertiser base and increase user churn. This brings a slight benefit to competitors (an estimated increase in fair value between 0% and 5%), and Snap again sees the most relative advantage.
