Founder of ByteDance Ltd. Zhang Yiming will restrict the ownership of the TikTok holder to an old college roommate and lieutenant, stepping down to work the world’s most important start before the highly anticipated market start.
Zhang will hand over the role of chief executive to TikTok owner to labor manager Rubo Liang, announced in an internal text posted online on Thursday. The billionaire businessman is still the chairman but plans to quit his daily activities because it was a growing burden in his time, said a person familiar with the matter.
Zhang, who will focus on the long-term strategy, is back as Beijing intensifies efforts to curb the influence of online companies and their billions of founders, from Jack Ma's Alibaba Group Holding Ltd. to Tencent Holdings Ltd. That defense campaign coincides with a series of initiatives from ByteDance that could boost the country's Internet site.
Liang takes the helm as ByteDance prepares the most anticipated public offering for the first time in the U.S. or Hong Kong. It is also planning its next big deal - a move to e-commerce that could compete with Alibaba and Meituan in the $ 1.7 trillion Chinese court.
"I feel that I have not achieved much as I have always wanted to achieve my previous goals in the areas of new strategic opportunities, organizational management, and social independence," Zhang said in a statement. "After a few months of thinking about this, I have come to the conclusion that stepping down as CEO, with all the day-to-day responsibilities associated with it, will allow me to have a greater impact on long-term plans."
Learn more: TikTok took President Trump Over the Ban and Won Big App
Zhang's handoff recalls the same act of the founder of Pinduoduo Inc. Colin Huang, who left his company manager to become a deputy two months ago. The pressures of running fast-moving, highly competitive businesses while serving the growing legal requirements may have put a strain on Zhang, who had begun to transfer responsibility.
In 2020, he appointed two executives to manage the growing Chinese side of ByteDance business. This month, he proposed the latest hiring with former Xiaomi Corp. chief financial officer. Shouzi Chew became the CEO of his U.S. business. Zhang said in the memorandum he began discussing with the small group the chances of having Liang as the new CEO this March. The two will work together over the next six months to ensure a smooth transition.
"The regulatory environment for technology companies in China is constantly changing and that requires a lot of energy and effort," said Shen Meng, director of Beijing-based retail investment bank Chanson & Co. "Wearing two hats in the company as big size as ByteDance is very stressful."
Learn more: A mature invitation to ByteDance Shows Blockbuster Revenue Projections
Zhang founded ByteDance in 2012 before using the highly refined AI search engines to create the hot news service Toutiao and the global video app TikTok. His first major success was Toutiao, which means “news headlines” in Chinese. TikTok became an international brand, with its cousin Douyin leading the Chinese domestic market. The founder is now listed as one of the richest people in the world after ByteDance shares were sold in private markets for more than $ 250 billion, people familiar with the deal said.
Liang, a businessman like Zhang, will oversee ByteDance's move to new platforms from e-commerce to educational devices. A junior official with Zhang studied microelectronics at Tianjin's Nankai University and shared a computer in writing, Zhang said in his 2016 public address. The duo founded-99fang.com - a real estate search service - in 2009 before teaming up with ByteDance three years later.
Learn more: ByteDance Eyes New $ 185 Billion Business Before Mega IPO
The internet titan now wants to increase advertising revenue for its Chinese-based businesses including Douyin and Toutiao to 260 billion yuan ($ 40 billion) this year from 183 billion yuan by 2020, reports Bloomberg News . The target does not include the hearing of the short video TikTok. It is also targeted at a total e-commerce value of up to 600 billion yuan, up from 170 billion yuan last year. Douyin targeted 680 million daily active users, compared to 610-620 million in March.
The aggressive intentions undermine ByteDance's intention to take over large Chinese Internet companies from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. on their turf.
ByteDance - more than double its net worth of $ 35 billion last year - has begun preparations for the IPO of some of its largest businesses, including Douyin, and opts between Hong Kong and the US as a listing site, people familiar with the matter have said. It could raise at least $ 1 billion from China's inventory, although negotiations are still small.
If ByteDance achieves its sales goal, its Chinese arm will have done in nine years what it took Facebook 13 to achieve, and that does not include TikTok and other overseas businesses. At $ 40 billion, the start-up ad business will be almost double that of YouTube. Reuters first reported Zhang's decision.
"ByteDance is mature enough to go back," said Ke Yan, a Singapore-based analyst with DZT Research. "Now he can choose to do what he thinks is important, unlike being a CEO who needs to handle things wrong."
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