Monday markets: TikTok begins to usurp Facebook
The ASX rallied last week, but as Wall St closes its week with a mixed session, due in part to continued interest rate hikes by the Fed, the ASX is primed to slip today. TikTok’s revenues reveal the Chinese-owned app is biting at the heels of Facebook, and may potentially eat into its user numbers and revenues.
TikTok Australia has proved itself to be a fierce competitor in the social media market, with its local headcount proliferating at a rapid rate.
In its recent Q2 reporting, Meta reported Facebook’s monthly active users (MAUs) to be at 2.93 billion, versus the 2.94 billion expected. Just under a year ago, TikTok hit 1 billion MAUs across the world, approximately 7 million of which are in Australia. TikTok’s intuitive and sophisticated algorithm has been pinned as the reason it continues to see such strong, consistent growth.
While Facebook is still miles ahead of TikTok in terms of local revenue, there is no question that TikTok may potentially wind up surpassing Facebook in relevance, growth and user numbers. Facebook Australia’s total advertising revenue last year was $1.1 billion, while TikTok’s 2021 revenue was almost $US50 million ($71.8 million), up from $US15.5 million from November 2019 to December 2020.
Meta did report fallen revenues since 2021 in its recent Q2 reporting – and monthly user numbers appear fairly stagnant, especially in contrast to the burgeoning threat of TikTok.
TikTok is owned by Chinese, Beijing-headquartered multinational ByteDance, which is privately held and reportedly valued at $140 billion. Analyst estimates determine that TikTok’s market share in social networking will top 20% this year, nearing 25% by 2024.
According to Bloomberg, TikTok’s annual revenues were $4.6 billion in 2021, and are expected to reach $12 billion by the end of 2022.
Read on for a wrap of financial news pertaining to media and marketing holding companies.
Seven West Media:
- SWM shares are trading at 0.46 AUD today.
- This month has seen a positive uptick in Seven’s market value – an increase of +0.05
- Seven West Media is poised to reveal its H1/Q2 earnings by the middle of this month.
- Paramount, a global competitor of Seven for the AFL streaming rights, has recently downplayed its interests in bidding for the deal, claiming it is chasing other commercial interests.
Nine Entertainment Co.:
- Nine is yet to release its H1/Q2 earnings, with results set to broadcast late this month.
- Nine has newly appointed Matt Stanton, a former Bauer Media chief executive as chief strategy officer.
- NEC shares are trading at 2.04 AUD today.
- NEC shares have risen +0.12
WPP:
- WPP released its earnings on Friday, increasing its outlook for earnings for the full year, giving shareholders a 20% bigger dividend.
- The advertising group announced it made £6.8 billion ($A11.8 billion) in half-year sales and reported a 10.2 per cent increase from the previous year.
- Profit in H1 2022 surged 12 per cent to £562 million ($A981 million) up from £502 million ($A876 million) a year earlier.
- Australia was the group’s weakest performing market.
- Growth remained stable, at 8.3% in the June quarter, slightly lower than Q1’s 8.9%.
- The second quarter saw significant assignment wins from Audi, Audible, Danone and Nationwide.
Alphabet:
- Alphabet recently released its Q2/H1 earnings, with revenues of US$69.69 billion just missing Wall Street forecasts of US$69.95 billion.
- Despite increased revenues compared to Q1, profits fell at Google. Alphabet brought in approximately $16 billion in profit during its second quarter of 2022, down from $18.5 billion during the same period last year
- The stock value of GOOGL has fallen significantly in 2022, although year-to-date losses of 23% are largely in line with broader NASDAQ trends.
- Alphabet shares are currently trading at 117.47 USD today, down −0.72
- Numbers are looking negative for the month overall, seeing a declined value of -1.88
Dentsu:
- Dentsu Group Inc. announced it has entered an agreement to acquire a majority stake in global technology and services firm, Extentia.
- Dentsu QLD last week announced three strategic senior appointments following a series of successful business wins.
- Dentsu’s share price trades at 4,685 JPY today, a decline of −60 (1.26%) since markets closed.
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