Overhauling TikTok: McCourt's Vision

By Sheila Dang and Krystal Hu

(Reuters) – U.S. billionaire businessman Frank McCourt is reshaping TikTok's business model as he prepares to bid for the Chinese-owned app.

Having previously owned the Los Angeles Dodgers baseball team, McCourt has garnered verbal funding commitments totaling $20 billion from a consortium of investors. This funding aims to rescue TikTok while it awaits a Supreme Court ruling on whether it must sell its U.S. operations.

Revamping Advertising

McCourt envisions transforming TikTok's advertising model, allowing users to control their ad preferences and content visibility. The app could also generate revenue through ecommerce and licensing data for artificial intelligence training, contingent on user consent, thus reducing dependence on advertisements.

> “When you give permission for your data to be used and you receive compensation, it's flipping this 180 degrees and giving the user the power,” says McCourt.

Legal and Ownership Hurdles

The proposal encounters challenges, particularly TikTok's stance that it cannot be separated from its parent company, ByteDance. McCourt plans to exclude TikTok's content recommendation algorithm from the bid to simplify negotiations with ByteDance, as the Chinese government has stringent export controls regarding such algorithms.

TikTok is appealing to the Supreme Court to challenge a law signed by President Joe Biden, which looks to force a sale due to national security concerns, or the app risks being banned by January 19.

McCourt predicts the Supreme Court will uphold the law, paving the way for negotiations with ByteDance. He emphasizes a proactive approach towards acquisition.

Conversations with Trump's Team

McCourt's team has initiated preliminary talks with members of President-elect Donald Trump's incoming administration. Although Trump attempted to ban TikTok in 2020, he has since expressed a positive attitude towards it.

Meanwhile, McCourt is also searching for potential CEO candidates for the envisioned transformation of TikTok. One individual reportedly approached was V. Pappas, TikTok's former chief operating officer, though he has not responded to inquiries.

Open-Source Plans

The revitalization plan includes transitioning TikTok's technology to an open-source protocol developed by Project Liberty, a nonprofit founded by McCourt. This protocol aims to empower users through better data control and ease of transferring information online.

> “This is both a big project to scale the technology that we've built, but it is also a vision for a better internet,” says McCourt, emphasizing the project's scope and collaborative nature.