A government TikTok ban became closer to a reality on Tuesday as a group of senators introduced the Emergence of Security Threats that Risk Information Communications Technology Act, also known as the RESTRICT Act. The bill would allow the government to clamp down on TikTok usage in the United States.
Without the emerging social media platform TikTok as a competitor, Meta (META), Alphabet (GOOGL) Snap (SNAP) could all see positive tailwinds for their business, according to Evercore ISI’s Director & Head of Internet Research Mark Mahaney. Snap and Meta have seen their stock prices tumble over the past year for a variety of reasons, but expert’s have pegged TikTok’s competition as a key challenge for both businesses.
But Mahaney notes the mere presence of TikTok has forced the social media companies to innovate already. Functions created amid the rise of TikTok, such as Instagram Reels and Youtube Shorts, have been chasing could help push further growth regardless of if the ban takes place.
Above, Mahaney joins Yahoo Finance’s Seana Smith and Dave Briggs to discuss the companies best positioned to benefit from further TikTok scrutiny.
Key Video takeaways:
0:05- Companies most similar to TikTok
1:00 The increase of shortform video on social media
Video Transcript
MARK MAHANEY: The two assets, I think, that we think based on survey work that are most similar to TikTok would be YouTube and Instagram in the form of like, lean back or even interactive entertainment. Facebook is– Facebook’s got a somewhat different demographic, and it’s a lot more about community and friends and family. Instagram is much more of an open entertainment network. And so is YouTube, by the way.
People voted Twitter is not. Twitter is a vastly different asset than this. And in core, Google has almost nothing to do with TikTok. But you actually make a really interesting insight. TikTok exploded the popularity of short-form video, so everybody copied it.
Facebook and Instagram have Reels. Snapchat has an asset, whose name escapes me now, but it is there on the right side of the screen. And then YouTube has Shorts. So yeah, there’s a great– it turns out, I’m not sure this is good or bad for society. I worry that it’s a little on the bad side– short attention, shorter and shorter attention spans.
But the market consumers, we love short-form video. TikTok proved it to us. And so other companies have been very good about copying what was really great innovation. You know, credit to them, ultimate credit to TikTok. But credit to these companies for coming up with things, these sort of spinoffs.
And by the way, it’s really helped them fundamentally. So even forget about what happens to TikTok, Facebook has seen an increase in its engagement, the amount of time that people spend on a site, precisely because of reels. It’s been very popular and very effective for Facebook. And my guess is that it’s going to be very popular for Snap. And my guess is that YouTube Shorts is building out greater interest in YouTube. So it’s kind of a win all across the ecosystem, even if TikTok isn’t banned.
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