We just posted another stellar quarter, and I’m thrilled about our momentum. Our entire organization is laser-focused on expanding our advertising business. In mobile gaming, we’re the leading advertising platform, trusted by all major clients. Outside gaming, we’re growing rapidly yet barely scratching the surface, with less than 0.1% penetration among potential advertisers. Our solutions are top-notch, and the organic growth ahead is exciting. So, why pursue TikTok?
The performance advertising gap
Since day one, our mission has been to build tools that empower businesses to market their products profitably. Advertisers now spend over $10 billion annually on our platform, generating revenue for their businesses that far exceeds that amount. This spend fuels profits, enabling our partners to create jobs and deliver better products to their customers.
Aside from Meta (across Facebook, Instagram) and YouTube (Google), few platforms have perfected performance display advertising. On mobile, where users spend 4-5 hours daily, platforms like TikTok, despite incredible engagement, fall short on advertising performance. TikTok boasts around 1.1 billion daily users outside China, yet its ad monetization is well below Meta’s. Why? We believe current restrictions and concerns around data and security severely limit its ability to refine its advertising algorithms needed to maximize revenue.
The economic loss is staggering. There have been reports that TikTok did around $20 billion in ad revenue outside China in 2024. If powered by cutting-edge technology like our Axon AI, which quadrupled advertiser spend on our platform in just two years, we believe that it could reach $80 billion. Based on our experience, advertisers see over a 2x revenue return on spend. That’s $60 billion in lost ad revenue, translating to $120 billion in missed revenue for businesses. Think about the jobs that could have been created. TikTok excels at AI—their recommendation algorithm is world-class and one of the first massively scaled implementations based on modern understandings of neural networks. Yet, data and security concerns have hamstrung their advertising potential. Without a change in control, they may never unlock this value. That’s where we come in.
Our Proposal: A partnership with TikTok Global
Our proposal isn’t a buyout—it’s a merger with TikTok Global, covering all assets outside China. We see this as a true partnership, leveraging our strengths to address security, data, and content challenges while unlocking massive potential. Here’s how we’d do it:
1. National security and data security
First, national security. Our proposed merger would give us control. This structure puts us in a position to ensure data and privacy standards are met in the U.S. and every market worldwide (outside China). Our expertise in recommendation algorithms makes us capable of removing biases in the algo and ensuring security around data. It’s not just compliance—it’s about building trust with users and regulators.
2. Youth safety and content
Second, we’d tackle youth content issues head-on. We’d implement age-appropriate experiences and robust content moderation focused on safety for all supported ages. As an American company that operates globally, we understand what’s culturally acceptable and age-appropriate. Beyond safety, we’d prioritize global free speech, striking a balance that respects users and communities.
3. Supercharging monetization—and the economy
Finally, the economic upside. We’d deploy our Axon AI advertising model to TikTok’s audience and allow their advertisers to buy our audience seamlessly. The synergies could generate tens of billions of revenue in the coming years. Returning to the example above, an extra $60 billion in ad revenue could drive $120 billion in revenue for businesses. Assuming $60 billion in profit for advertisers and $50,000 per job, that’s 1.2 million jobs globally that would be created. Many of these businesses are American, but others span China and beyond, fostering global economic expansion amid trade tensions and economic shifts.
A note to our shareholders
Let’s be clear: this is a long shot. But building one of the world’s best advertising AI models was also a long shot, yet we did it. We’re not here for small bets. Our goal is to build a massive business that creates value for the world and our shareholders. That said, our core business remains our focus. Outside this blog, I’m not planning to address questions about this proposal until there’s something more material to share. Rest assured, we’re hyper-focused on our mission: helping businesses profitably connect with their ideal customers.
That’s our vision. A partnership to tackle tough challenges, unlock unparalleled economic growth, and reshape the future for businesses and communities worldwide.
-Adam
Disclaimer: Forward-Looking Statements
Information regarding TikTok and its business are from publicly available sources as of the date of this blog post. This blog post contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases, you can identify forward-looking statements because they contain words such as “may,” “would,” “expect,” “going to,” “could,” “intend,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions. Forward-looking statements in this press release include statements regarding our proposed merger with TikTok covering all assets outside of China and our expectations regarding synergies if a transaction is completed. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in our plans or assumptions, which could cause actual results to differ materially from those projected. These risks include risks related to our ability to reach an agreement for a merger with TikTok, our ability to close a merger with TikTok if an agreement is reached, including due to regulatory and other factors, and our ability to successfully achieve synergies if a transaction is completed, as well as other risks and uncertainties more fully described in our filings with the U.S. Securities and Exchange Commission. The forward-looking statements in this letter are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.
