AppLovin wants to partner with “undermonetised” TikTok globally

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AppLovin wants to merge with TikTok’s international operations to fuel its ad monetisation, says CEO Adam Foroughi.

This week the fast-growing ad-tech company confirmed its interest in acquiring the popular video-sharing app in all markets outside of China – not just in the US.

The apparent 11th hour proposal has been given a boost by the US administration’s decision to extend the divest-or-ban deadline for the app, previously set for April 5th, by a further 75 days to mid-June.

Strategic partnership

Speaking to CNBC, Foroughi said he felt AppLovin’s proposal is the “best possible solution” for all parties involved.

“We’re in a position where we’re proposing that they merge the entire global business of TikTok with our company,” he said.

“And the reason why this is important is that the only way to abide by the law and solve the national security concerns here, we think, are that a Western company owns this app.

“Now there are a few business reasons too that this is important for a proposal like this. We’re an advertising company, our business has grown immensely over the last couple of years, after we launched an AI model in advertising.

“If you can pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof.”

Ad revenue boost?

Foroughi said any deal would involve a partnership with TikTok to combine its advertising personalisation algorithm with the platform’s recommendation algorithm. He said at present, TikTok was “undermonetised”.

“We have business reasons, but we also think most importantly we solve the national security angle and give a win to the President, but also give a win to the Chinese because they can use the partnership with us to effectively run their business in the public markets, which is something they they’ve wanted to do for a few years,” he explained.

Foroughi suggested so far it has only lodged its interest with the US administration and has yet to speak officially with TikTok owner ByteDance about a deal. 

“The only thing we know is that the Chinese government has gone on record saying a fair deal is something they could get behind, not a forced deal,” he said.

He added: “What we’re bringing to the table is a partnership, a merge, where we resolve the headache they’ve had internationally around data and security, we do it right, and in addition to that, we help them expand their app with better advertising expertise, and they benefit from all the future growth. That’s really important to the proposal that we’ve put forth.”