Before His Current Effort To Demonize TikTok, Zuckerberg Tried To Buy It

The oldest trick in the geo-political book is demonizing your competitors when your own behavior causes you to feel threatened. JL


Ryan Mac reports in BuzzFeed:

TikTok is a threat to Facebook’s hegemony. To teens, it’s not lame yet. Because of its Chinese ownership, TikTok has become a convenient bogeyman to the “privacy-focused,” America-first narrative championed by Zuckerberg. Its existence represents one of Facebook’s best counters to calls for regulation. “Facebook is pissed that TikTok is the one thing they can’t beat. The more Zuckerberg has come under scrutiny, the more TikTok has shown up in his speeches, interviews, and op-eds.”

By the summer of 2016, Facebook was aggressively courting the world’s most populous country. Having largely saturated most of the developed world, the social network turned its attention to China, which banned Facebook in 2009, cutting it off from more than 700 million internet users.
So like any shrewd businessperson, Mark Zuckerberg embarked on a concerted charm offensive to court Beijing. He taught himself Mandarin and then used it to deliver a well-received speech at China's Tsinghua University. He touted Chinese science fiction books to his Facebook followers and posted a photo of himself jogging through a smog-filled Tiananmen Square. And he reportedly asked Chinese President Xi Jinping to bestow an honorary name on his then-unborn daughter during a White House dinner.
As Facebook’s chief wooed the Chinese government publicly with demonstrations of deference and appeasement, he was quietly working to close an acquisition deal with a Shanghai-based startup that, had it been consummated, would have reshaped the social media landscape as much as the social network’s purchase of Instagram or WhatsApp had. Zuckerberg wanted Musical.ly, a Chinese lip-synching app that was popular among American teens and, according to three people familiar with the conversations, Facebook spent much of the second half of 2016 trying to make that happen.In August that year, Zuckerberg invited Musical.ly cofounder Alex Zhu to Facebook’s Menlo Park, California, headquarters for a handful of exploratory talks with his team including then–Instagram CEO Kevin Systrom and Javier Olivan, Facebook’s vice president of growth. The following month, a Facebook team traveled to Shanghai to continue those conversations, this time with both Zhu and fellow cofounder Louis Yang.
Sources said the talks were serious, though a deal never materialized. Some 14 months later, Chinese conglomerate ByteDance acquired Musical.ly for around $800 million. It later merged the app with the already existent TikTok to form the popular video platform that Zuckerberg has recently been demonizing as a threat to Western tech supremacy.
“Until recently, the internet in almost every country outside China has been defined by American platforms with strong free expression values. There’s no guarantee these values will win out,” Zuckerberg said in a speech last month at Georgetown University. “While our services, like WhatsApp, are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the Chinese app growing quickly around the world, mentions of these protests are censored, even in the US.”
That Musical.ly — or the platform that became the foundation for Facebook’s main social media threat today — was an acquisition target before Zuckerberg's recent shift on China is telling. Having all but given up on entering the country, Zuckerberg is now using China as a political cudgel against TikTok. Yet whether or not he thinks it truly represents a threat to Western values and the open internet, his past actions demonstrate he views TikTok as a clear threat to Facebook’s hegemony.Because of its Chinese ownership, TikTok has become a convenient bogeyman to the “privacy-focused,” America-first narrative championed by Zuckerberg and his lieutenants. Its very existence represents one of Facebook’s best political counters to the boisterous calls for regulation in a new landscape where the company’s greatest fears are fueled by DC politicians, not Silicon Valley competitors.
As multiple high-ranking former Facebook employees told BuzzFeed News: Facebook needs TikTok. “Facebook is so pissed that TikTok is the one thing they can’t beat that they’ve turned to geopolitical arguments and lawmakers in Washington to fight their fight,” one said.

“Facebook is so pissed that TikTok is the one thing they can’t beat that they’ve turned to geopolitical arguments and lawmakers in Washington to fight their fight.”

Zuckerberg’s recent TikTok remarks are particularly opportunistic; they come as lawmakers have also shifted their attention toward the reported censorship and national security concerns of the Chinese video platform. Multiple senators, including Florida’s Marco Rubio, Arkansas’s Tom Cotton, and New York’s Chuck Schumer, have asked for government inquiries, with the Committee on Foreign Investment in the United States (CFIUS) opening one into ByteDance’s acquisition of Musical.ly earlier this month.
Last week, Missouri Sen. Josh Hawley — a fierce critic of Facebook’s — called the Chinese company before a Senate Judiciary subcommittee. He lectured an empty chair reserved for its executives when TikTok failed to show up.
“Despite claims of being independent, witnesses testified today that [TikTok is] effectively controlled by Beijing,” Hawley tweeted following the hearing. “Time for @tiktok_us to testify UNDER OATH.”
TikTok has said it doesn’t take down videos based on the requests from the Chinese government, though stories in the Guardian and the Washington Post have shown that the company has censored controversial content in the past. BuzzFeed News’ own examination of possible censorship on the platform was inconclusive.
TikTok declined to comment for this story but said in a statement to Politico that it too had noticed the aggressive rhetoric from Facebook.
"The more Mark Zuckerberg has come under scrutiny, the more TikTok has shown up in his speeches, interviews, and op-eds,” said a TikTok spokesperson. “You would have to ask him if this is pure coincidence."
Some believe it is not. Calling Zuckerberg “a rationalist,” a former Facebook executive told BuzzFeed News his recent posture is undoubtedly motivated by the Chinese government’s lack of concessions on operating there. Zuckerberg’s was not developed out of principle but business practicality.
“Everything he says is directionally correct, but I don't think it's that sincere,” said the former executive. “Yes, he really wanted to get into China, but we didn't get very far."
A spokesperson for Facebook declined to comment on the company’s previous acquisition talks with Musical.ly and said the social network has “always been transparent that we want to get into China, but we could never come to an agreement.”
“The suggestion we are only recently for free expression ignores the entire history of the company and the products we’ve built,” they said.
Two former Facebook employees, who declined to be named for fear of reprisal, scoffed at that characterization and pointed to an internal censorship tool that the company had been developing. First reported by the New York Times in 2016, the tool, which had Zuckerberg’s blessing, was said to have the ability to suppress posts from appearing in News Feeds in certain regions, like China.
“We have long said that we are interested in China, and are spending time understanding and learning more about the country,” a Facebook spokesperson said at the time. The company did not dispute the Times’ report.
While the tool never launched, one former leader recalled executives mapping out other potential products for the China market, while another said that some employees made secret trips under tourist visas to the country for research into developing its business there. Facebook has since been able to maintain a small presence in China by partnering with local, third-party sales companies to allow Chinese businesses to buy ads on the platform.

Last year, ad sales from Chinese businesses accounted for 10% of the company’s annual revenue, or $5 billion, according to Pivotal Research Group. Lately, those advertisers have included state-run media outlets, which have bought sponsored posts claiming that reports about the oppression of ethnic minorities in China’s Xinjiang region are untrue.
While a Facebook spokesperson declined to comment on the company’s ad revenue from China, they pointed to Zuckerberg’s speech at Georgetown to illustrate that Facebook’s internal argument on China has evolved.
“I wanted our services in China because I believe in connecting the whole world and I thought we might help create a more open society,” Zuckerberg said in his talk. “But we could never come to agreement on what it would take for us to operate there, and they never let us in. And now we have more freedom to speak out and stand up for the values we believe in and fight for free expression around the world.”
Former Facebook employees wondered where that “freedom to speak” was three years ago.
“It’s not that they are taking a principled stand in order to avoid doing business in China because of some ideological or principled standard regarding censorship or even human rights,” said one former communications leader. “It’s that they have not figured out a business model where upon both the Chinese and Facebook agree.”

Lasso’s Facebook “Baggage”

When it was unable to close a deal for Musical.ly, Facebook turned to another tried-and-true strategy: copying.
“At Facebook, we know we have the scale, so even if we’re not first, we know that we can win with our sheer size,” a former employee told BuzzFeed News. They pointed to Instagram’s mimicking of Snapchat stories, a feature whose success on the Facebook-owned app for photo sharing undercut its competitor.
In November 2018, Facebook tried to do the same thing to TikTok. It launched Lasso, a stand-alone video app with an interface and features similar to TikTok’s. Promptly branded a copycat, the app gained little traction. Once users understood Lasso was a Facebook product, they associated it with that platform’s older community and culture and rejected it, said Ryan Hoover, a venture capitalist and the founder of the site Product Hunt.
“TikTok just doesn’t come with a lot of baggage that Facebook has,” Hoover told BuzzFeed News. “To teens, it’s not lame yet.”
That’s certainly backed up by the numbers. In February, research firm Sensor Tower estimated Lasso had been downloaded 70,000 times since its launch, compared to nearly 40 million US downloads of TikTok in the same time period. When combined with its Chinese sister company, Douyin, TikTok had 680 million monthly active users as of February, according to internal documents uncovered by eMarketer, and it’s flittered in and out of the No. 1 spot among popular free apps in Apple’s App Store in November. Meanwhile, Lasso hasn’t even cracked the top 200.
“It’s clear that Zuckerberg doesn’t understand TikTok,” said Jess Bahr, a social media consultant, citing recent leaked comments he made at a Facebook employee meeting where he compared the app to Instagram’s Explore page. “TikTok is different because it’s created a culture around memes and themes with an algorithm that serves content people didn’t even know they wanted.”
Critics like Bahr wonder if Zuckerberg even grasps TikTok’s appeal. He doesn’t appear to use it. The Facebook CEO’s unverified TikTok account, @finkd — which is linked to his verified Instagram and which a source familiar confirmed was his — has no activity or likes. It follows 61 users, including celebrities like Ariana Grande and Shaq, but seems mainly focused on the verified, blue-checkmarked teens that have amassed millions of followers on the platform.
“For a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies, and then there was this parallel universe of Chinese companies that pretty much only were offering their services in China,” Zuckerberg said to his employees in leaked audio from July meeting obtained by the Verge. “TikTok ... is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world.”
Facebook declined to comment on Zuckerberg’s TikTok account and would not say if he used Lasso, though BuzzFeed News found no evidence of the company’s chief executive on the copycat platform.That, however, hasn’t stopped Zuckerberg from signing off on other replication projects. On Tuesday, Instagram announced a TikTok clone for Brazil, its first attempt to introduce video meme functionality into the photo platform.

Facebook Vs. Them

In September 2018, Facebook Chief Operating Officer Sheryl Sandberg publicly signaled that the company was backing away from China. Appearing in front of the Senate Intelligence Committee, Facebook’s number two executive said the company would only operate in countries that respected its values.
“And that would apply to China as well?” Sen. Marco Rubio asked.
“That would apply to China as well,” Sandberg replied.
By March this year, Facebook’s retreat from China was more pronounced. Announcing his new vision for a “privacy-focused” communications platform, Zuckerberg said Facebook would not build data centers in “countries that have a track record of violating human rights like privacy or freedom of expression.” A high-ranking Facebook official later told BuzzFeed News this all but ruled out the social network’s return to China.
It’s no coincidence that Facebook’s demonizing of TikTok came as it distanced itself from China, said three former Facebook officials. As talk of antitrust regulation heated up this spring, Sandberg went on CNBC to suggest that breaking up Facebook would advantage Chinese tech firms. That went hand in hand with an argument made by a Facebook representative during a House Judiciary subcommittee hearing in July on online platforms and competition.“We compete with companies from all around the world," said Matt Perault, Facebook’s head of global policy development. "TikTok, for example, a Chinese app launched less than three years ago, has been downloaded more than a billion times and was the most-downloaded iOS app in 2018.”
Thus far, that argument has had varying degrees of success on Capitol Hill. Rhode Island Rep. David Cicilline, the chair of the House Judiciary Antitrust Subcommittee, called Facebook’s us-versus-them argument “exactly why competition matters.”
“Americans should not have to choose between a dominant American firm with a horrible track record on privacy and a Chinese company that reportedly censors speech to advance China’s policy goals,” he said to BuzzFeed News. “We can do better.”
Virginia Sen. Mark Warner said there was some possible validity in Chinese companies stepping into a void vacated by American firms, but said the notion that “a nonregulated Facebook as somehow being a choice for good or the values or the West” is “debatable,” citing Russia’s use of the platform to interfere in the 2016 presidential election. Another Republican congressional aide was more blunt.

“Let’s not kid ourselves, [Zuckerberg’s] stance on China is not principled,” they said, citing Facebook’s past censorship tool. “He’s just got nothing to lose by doing this.”
What’s clear is that Facebook now has a go-to target — one that it can use to buttress against multiple federal and state antitrust investigations or deploy to highlight Chinese censorship and data control in important speeches or at meetings with lawmakers. And as Facebook digs deeper into TikTok, Zuckerberg is simultaneously putting more barriers between his company and Beijing.
"I'd much rather have a Mark Zuckerberg that says we're not going to operate in China and be a beacon for freedom around the world than have a Mark Zuckerberg that operates in China," said one former Facebook executive.
For now, as TikTok’s CFIUS investigation ramps up and politicians on both sides of the aisle ask questions, expect Facebook to fan the flames. On Friday, Instagram head Adam Mosseri was asked onstage at a Wired event what he thought of competition from TikTok.
"We’re talking about a company that cloned Musical.ly, then bought the thing that they cloned, and renamed it to their app,” he said. “I don’t want to curse, but that’s some serious shit."
Imagine what he’d be saying if Facebook had bought Musical.ly.