Facebook (NASDAQ: FB) rarely meets a competitor it doesn’t want to acquire. Failing that, it seeks to vanquish them.
After a bid to purchase TikTok’s predecessor fizzled out, the Mark Zuckerberg-led social media giant responded to its growing popularity by unveiling Lasso, a virtual clone of the short-form viral video app.
In the U.S., where TikTok has grown incredibly popular, Lasso managed fewer than 600,000 downloads. Facebook shut down the app earlier this month.
Facebook’s efforts to outmaneuver TikTok didn’t end there. In August, it will launch a 15-second video feature on Instagram called Reels.
And if there’s any doubt Facebook is taking aim at TikTok, a Wall Street Journal report revealed the company is dangling cash to lure creators away from the app. Top stars who sign exclusive deals stand to earn hundreds of thousands of dollars.
It’s not the first time the Silicon Valley leviathan has assumed that the solution to its woes is throwing money at a problem. Nor would it be the first time an exercise in futility has ended disastrously for Facebook.
Facebook may succeed in luring some TikTok creators over to Reels. There’s no guarantee their fans will join them.
You don’t have to look deep into the past for an example.
Microsoft (NASDAQ: MSFT) handed millions of dollars to streamers such as Tyler “Ninja” Blevins and Michael “Shroud” Grzesiek to poach them away from Twitch and bring star power to Mixer.
Let’s not get too ahead of ourselves. Before Facebook can worry about TikTok stars bringing their fans over to Reels, it has to sign them.
A pile of cash is a tantalizing incentive, but requiring creators to sign exclusive contracts is still a big ask.
Given Facebook’s history of failed products, TikTok stars will be wary of burning their bridges with an app that has over two billion downloads.
Besides Lasso, the list of failures at Facebook includes AOL-style chatroom app Rooms, two Snapchat lookalikes, and Masquerade – an app that let users create filters for selfies.
Despite its huge and unprecedented success in the U.S., TikTok has enough foresight to avoid resting on its laurels.
Once it saw Facebook making overtures to its creators, TikTok set up a $200 million fund to reward its top talent.
It’s the latest evidence that it might be too late for Instagram Reels to compete directly.
As Facebook knows too well, given its dominance in conventional social media, some market dynamics are hard to overcome organically.
At this point, the best Facebook can likely hope for is a blanket ban on TikTok.
Disclaimer: This article represents the author’s opinion and should not be considered investment or trading advice from CCN.com. Unless otherwise noted, the author has no position in any of the stocks mentioned.