Snap vs TikTok

Evan Spiegel pitched the concept of disappearing photo messages as a class project at Stanford in 2011. His classmates Bobby Murphy and Reggie Brown helped build the first version. The app launched as Picaboo in July 2011, renamed Snapchat in September 2011. Brown was pushed out of the company shortly after launch; he later sued Spiegel and Murphy, claiming they had stolen the original concept. The lawsuit was settled for an undisclosed amount. Brown's name was not included when Snap went public.

Mark Zuckerberg flew to Los Angeles in November 2013 to meet Evan Spiegel in person and offer $3 billion in cash to acquire Snapchat. Spiegel, then 23 years old, turned him down. The decision was widely criticised — $3 billion for a company less than two years old with no revenue seemed extraordinary. Spiegel believed Snapchat would be worth far more. Within a year, Snapchat was raising money at a $10 billion valuation.

Snapchat launched Stories in 2013 — a format allowing users to post photos and videos visible for 24 hours before disappearing. The format was so successful that Facebook copied it directly into Instagram in 2016, then WhatsApp, then Facebook itself. Zuckerberg acknowledged the copying openly. Instagram Stories rapidly overtook Snapchat's Stories in daily users. The company that had rejected Facebook's $3 billion acquisition watched Facebook replicate its most innovative feature and deploy it across platforms with a combined user base ten times larger than Snapchat's.

Snap went public in March 2017 at $17 per share, valuing the company at $24 billion — making Spiegel one of the youngest self-made billionaires in history. The IPO gave Spiegel and Murphy shares with ten times the voting rights of public shareholders, giving them permanent control regardless of investor sentiment. Snap's user growth subsequently slowed dramatically as Instagram Stories captured the casual user market.

Snap reported revenues of $5.3 billion for 2024 — up 16% — with 443 million daily active users. The company had successfully built a large, profitable-ish advertising business. But the stock had never recovered to its $17 IPO price since falling 80% in the 18 months following the IPO, reflecting investor skepticism about Snap's ability to grow beyond its core teenage demographic and compete with TikTok, Instagram Reels, and YouTube Shorts for creator content. The founder who had rejected $3 billion at 23 had built a $12 billion market cap company — real, but a fraction of what the rejection had been expected to yield.

Zhang Yiming founded ByteDance in Beijing in 2012, initially building a news aggregation app called Toutiao — "Today's Headlines" — that used machine learning to personalise content without requiring users to select their interests. The algorithm learned what each individual user wanted to see faster than any human editor could. Toutiao reached 13 million users in 90 days. Zhang had discovered something that would define the next decade of social media: the algorithm was better at predicting human attention than humans were.

ByteDance launched TikTok internationally in 2017, then acquired Musical.ly — a lip-sync app popular with Western teenagers — for $1 billion in 2018 and merged it into TikTok. The acquisition instantly gave TikTok 100 million existing Western users and a viral content format. TikTok grew faster than any social platform in history, reaching 1 billion monthly active users by 2021.

In August 2020, U.S. President Donald Trump signed executive orders attempting to ban TikTok, citing national security concerns about Chinese access to American user data. Courts blocked the ban. TikTok continued operating. Four years later, the threat would return — with more legal force.

In January 2025, the U.S. Supreme Court unanimously upheld legislation requiring ByteDance to divest TikTok's U.S. operations or face a ban. On January 18, TikTok went dark in America for approximately 12 hours. On his inauguration day, January 20, President Trump signed an executive order delaying enforcement — the same man who had tried to ban TikTok in his first term was now saving it. He extended the delay three more times through 2025.

In December 2025, ByteDance signed a deal backed by President Trump to divest TikTok's U.S. operations into a new joint venture — TikTok USDS — majority-owned by American investors including Oracle and Silver Lake. The deal formally closed on January 22, 2026. ByteDance retained a minority stake and licensed its algorithm to the U.S. entity. TikTok remained available to 170 million American users. The most consequential national security battle over a social media platform in history had ended with a corporate restructuring that satisfied almost nobody — and kept TikTok running anyway.