TikTok Parent's Founder Zhang Yiming to Step Down as CEO -- 2nd Update
May 20 2021 - 4:49AM
Dow Jones News
By Liza Lin in Singapore and Yoko Kubota in Beijing
ByteDance Ltd., the owner of popular short-video app TikTok,
said its founder Zhang Yiming would step down as chief executive,
the latest Chinese tech boss to resign as the government ramps up
pressure on the sector.
Mr. Zhang appointed co-founder Liang Rubo as his successor and
said he was stepping aside to focus on long-term strategy.
Concerns about the Chinese company's future in the U.S. have
been fading as geopolitical uncertainty eases, only for Bytedance
to face pressure at home.
The resignation of Mr. Zhang, 38 years old, follows those in
March at financial-tech giant Ant Group Co. and e-commerce company
Pinduoduo Inc. ByteDance had an executive shake-up in April, when
Shou Zi Chew was named CEO of TikTok.
The executive transition will take place over six months, Mr.
Zhang said in a letter to employees on Thursday. He will still
remain on ByteDance's board of directors, a spokesman said.
"I believe I can best challenge the limits of what the company
can achieve over the next decade, and drive innovation, by drawing
on my strengths of highly focused learning, systematic thought, and
a willingness to attempt new things," Mr. Zhang said in the letter,
which the company posted online.
Beijing-based ByteDance, which counts Carlyle Group and Sequoia
Capital among its backers, is one of China's most valuable
startups, with a valuation of $180 billion as of December. Thanks
to the popularity of TikTok in the U.S., Europe and elsewhere, it
became one of the first Chinese internet companies to build a
successful brand in the West.
Yet incoming CEO Mr. Liang, 38, inherits a company that is
facing growing government pressure in China to stay in line.
In recent months, the company has been called in by authorities
every few weeks. In April, ByteDance was among 34 of China's
biggest tech companies that made public pledges to comply with the
country's antimonopoly laws, shortly after e-commerce giant Alibaba
Group Holding Ltd. was hit with a record $2.8 billion in antitrust
fines.
Its infractions have included improper big data usage and
problematic content. Last month, ByteDance was among 13 companies
ordered by the central bank and other regulators to adhere to much
tighter regulation of their data and lending practices.
In March, the antitrust regulator fined ByteDance's subsidiary
the equivalent of about $78,000 for having failed to properly
report a previous merger. Around then, ByteDance was one of 11
companies ordered to conduct a security review over the use of what
is known as deepfake technology, enabling the creation of
hyper-realistic fake videos. Meanwhile, the ByteDance subsidiary
that operates Douyin, its domestic Chinese short-video service, was
fined twice this year with a total penalty of $9,300 over improper
content.
Mr. Liang shares a close relationship with Mr. Zhang. They were
dorm roommates at Nankai University, where Mr. Liang graduated with
a microelectronics degree. Together, the two also founded a startup
focusing on real estate before starting ByteDance.
"This is a great challenge for me and the pressure is big," said
Mr. Liang, the current head of human resources and management at
the company, in a letter to employees seen by The Wall Street
Journal. He has also previously served as the company's head of
research and development.
ByteDance has built a good team, he said, adding, "I believe we
can continue to make breakthroughs and reach new heights with
everyone's cooperation and efforts."
TikTok's global success has placed it and ByteDance under
scrutiny in the West. The U.S. government has investigated whether
TikTok poses a risk to national security over concerns that China
could have access to the personal data of American users.
TikTok has tried to distance itself from its Chinese roots
through various initiatives. Still, the Trump administration issued
an executive order last year that would ban the app unless it found
an American buyer. Oracle Corp. and Walmart Inc. were in a group
having talks to buy TikTok's U.S. operations, which Mr. Zhang
fiercely resisted. Then, the Biden administration in February
shelved plans to require the sale.
Raffaele Huang contributed to this article.
Write to Liza Lin at Liza.Lin@wsj.com and Yoko Kubota at
yoko.kubota@wsj.com
(END) Dow Jones Newswires
May 20, 2021 04:34 ET (08:34 GMT)
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