Learning from TikTok’s Octopus Strategy

TikTok may be gone. It's lessons shouldn't be ignored.

Okay, so TikTok’s “gone.” It’s a day many people saw coming, and a day that many people argued could never happen. The internet, folks. But with TikTok’s early demise now one of the only conversations happening online, it’s a good time to study what made TikTok’s continued growth so successful outside of its original video feed. By the end of TikTok’s life in the United States — and I have a feeling it may come back in some capacity — TikTok wasn’t just a video app by any stretch of the imagination. TikTok was its own conglomerate in its own right, but it didn’t look like a typical conglomerate.

In becoming the conglomerate of tomorrow, TikTok’s secret sauce isn’t strictly a powerful algorithm that makes the laborious task of thinking all but obsolete. TikTok’s success actually looks a lot like Amazon’s one-touch-for-all-needs strategy.

One underlying thesis that guides Posting Nexus is the three A’s of information empires: accessibility, affordability, and availability. These principles are apparent in Facebook, in Google, in Netflix, in Reddit, and just about every other stock trading above $100. Another underlying thesis is that lines between information and entertainment have blurred into one indistinguishable shape, and most people are willing to sacrifice more on their end if other problems are eliminated.

Ease of friction is problem solving. For example, instead of having to figure out what to watch or where to watch it while also trying to determine what to buy for a friend’s birthday and simultaneously helping someone with homework. All of these tasks might take several different websites or more time hunting down information. If one app can perform all those tasks and ease friction, it solves problems that weren’t problems until someone seemingly solved them. These problems weren’t problems; they were frictions.

Frictionless services define the most popular apps in our lives. I mentioned Amazon earlier because Amazon removed friction by throwing everything into one app. As TikTok started expanding outside its core video feed, executives decided to build inside of its own ecosystem instead of trying to widen its grip on attention through new partnerships and acquisitions.

Google executives want a stronger hold on search in the midst of increased competition and set up a direct relationship with Reddit. Meta wants to embolden its mobile-first strategy and acquires WhatsApp to further its role as a communications utility on top of its social media business. And even Amazon looks outside of its own system for certain areas, like its acquisition of OneMedical.

Traditional conglomerate shaping strategies look like those examples. What does the new age of information conglomerate building look like? How is TikTok’s approach to businesses like search and social commerce different than what Facebook did with Instagram and WhatsApp? On the eve of TikTok’s potential shutdown, I want to look at these different tentacles that aren’t the video feed we all think about when we hear the word TikTok. TikTok is so much more than a short form video app — it is a retail giant, a search engine, and a news source. And it feels different than so much of what came before it even if the playbook is eerily similar.

Conglomerates and Tentacles

It wasn’t too long ago that the age of conglomerates came into being. The 1960s saw the first boom in conglomerates following a more lax antitrust policy in the United States, with media conglomerates coming into fruition in the late ‘80s and ‘90s. In 1984, more than 50% of media within the United States was controlled by 50 companies. Less than 30 years later, six major companies would control more than 90% of all media. Conglomerates like Disney, NBCUniversal (GE), Paramount, and Time Warner all benefited from deregulation first policies enacted during Reagan’s time allowed for consolidation to occur more freely without fear of government intervention via antitrust rulings.

Why did media conglomerates come into power? Unlike traditional conglomerates within transportation or banking, the goal wasn’t simply to command the most square footage within a specific sector. It wasn’t just to control the most money or monopolize the most real estate. Media conglomerates found ways to pay for riskier products by expanding the balance sheet.

Take GE and NBCUniversal. General Electric wanted to diversify its revenue streams and looked to the fledgling TV media business, which NBC was a cornerstone of thanks to its history in American homes through its radio days, to help expand its areas of monetization beyond its industrial routes. Access to programming — otherwise known as vertical integration — then allowed GE to hock its products through its TV series and commercial airtime.

New ownership was also beneficial to NBC, who didn’t have to worry about a few projects wiping out the entire company as Heaven’s Gate did with United Artists back in 1980 when the $200 million film lost more than $190 million, becoming one of the biggest theatrical disasters in history and wiping out the studio.

An even better example is Disney. Prior to Michael Eisner coming in as C.E.O. in 1984, Disney was a movie studio and a theme park business. Certainly its film business was iconic and its theme parks revolutionary, but these businesses didn’t capture new battles for attention.

Under Eisner, Disney purchased ABC and ESPN to help grow its broadcast and cable businesses — the latter of which would define unprecedented revenues for the Mouse House through the early 2010s. Disney acquired gaming studio Avalanche Software in 2005 to try and compete with new competition from Nintendo, Sony, and Microsoft. In 2016, Disney also bought BAMTech, a technology company to help establish the company’s direct-to-consumer ambitions.

While there were a number of other, arguably even more important acquisitions along the way (Marvel Entertainment, Lucasfilm, Pixar), these aforementioned purchases helped create new tentacles. Marvel, Lucasfilm, and Pixar expanded land. Both types of conquest are important, but it’s the former that moves the company into new worlds instead of dominating in one specific world. Every major information conglomerate pursues a similar strategy.

What’s changed is where the tentacles lead back. The three-brained octopus head used to represent the main corporation connecting all these different companies. Today, that same head represents the user. In a direct-to-consumer, mobile-first world, all that matters is whether the information and tech products are seamlessly combined into one app for almost all needs.

Different parts of Amazon may be accessed on different devices for different reasons, but everything can be accomplished through the app. That’s not necessarily true for Reddit, where the search function is so unusable that people started appending “reddit” to their Google queries to better find posts. That’s also not necessarily true on Facebook where chatting with a friend whose number I don’t have requires me to use two different apps (Instagram/Facebook and WhatsApp) instead of combining everything into one space. Nor can I necessarily shop directly from WhatsApp if a friend sends me a product.

The rational to form a conglomerate is to protect the interests of the company in the face of competition from looming threats like modern technologies and consumer trends. In order: the telephone supplanted the telegraph; radio supplanted the telephone; television supplanted the radio; internet supplanted the television; social media supplanted the internet.

There are a couple of paths forward that companies in the information space may consider essential from a defensive position. Artificial intelligence is one. Retail is another. VR potentially, too. Current conglomerates have their hands in these buckets. YouTube and Google Search (along with Gmail) is the clearest example on the infotainment side. Same with Amazon when looking at Prime Video, Prime, and Prime Music. Generally, most companies are trying different AI strategies to help these businesses grow without thinking of AI as its own business right now, unlike Meta or Microsoft.

The problem is that none of these are within one unified ecosystem. There is a friction facing a consumer group used to frictions being eliminated. In a one-tap age, different defensive measures that don’t all redirect back to the same head might as well not be in the same ecosystem. Enter TikTok’s interesting play.

TikTok as a search engine, TikTok as a retailer

Nearly 50% of Gen Z used social media and social video as their primary search in 2024, according to a Talker Research report. These findings are inline with Pew Research, which found that news consumption on Facebook and X have decreased between 2020 and 2024, while news consumption on YouTube, TikTok, and Instagram have increased sharply. Reddit has remained relatively stagnant. TikTok saw the strongest jump in being the primary way people within the Gen Z cohort got their news, jumping from around 22% in 2020 to more than 50% in 2024.

TikTok has invested in search over the years, launching the “TikTok Search Ads Campaign” in September. Additional numbers from The Drum illustrate just how valuable TikTok saw the feature: “data from June indicates that 57% of users use the platform’s search function – and 23% search for something within 30 seconds of opening the app.”

TikTok isn’t ever going to be a Google Search killer. Search makes up more than 50% of Alphabet’s revenue still, driving more than $49 billion in Q3 alone. Google, however, isn’t designed to keep people within Google. It’s a directory. It’s the front page of the internet. People use Google to get to where they need to go. Some of this has changed over the last year with the introduction of Google Overview AI, which summarizes points from various articles and pages to present a quick answer directly within the Search window, similar to what ChatGPT does for its users, but Google is also reliant on publishers creating content that Google can pull from or, theoretically, still direct queries toward.

TikTok is reliant on people already building for the app directly. It’s building a search ecosystem for those who don’t want to click on another link. You’ve heard the expression “go deeper,” often used in reference to learning about a news story? Consider this the alternative people want more of: “skim faster.”

We can see the “skim faster” mentality in other product developments. Google integrating Gemini into Gmail to help make sense of things like newsletters. TikTok smartly never tried to compete with Google for total search attention, but competed for search attention within a format that was already favored by people already on its app. They’re already scrolling. They’re already watching. Adding another video to the queue, even if it takes longer than reading through an AI summary of an article (I can’t even begin to tell you how bleak that statement is), is a natural continuation of an activity they’re locked into.

TikTok’s retail strategy follows the same playbook. It’s best to look at the difference in how shoppers on TikTok treat their shopping experience versus how people approach Amazon and Instagram.

TikTok’s biggest hurdle is that it doesn’t have anything close to the market share that Amazon and Instagram have when it comes to shopping. I’d argue that while attaining market share isn’t an easy or cheap task by any means, it’s easier to focus on building scale than it is to bring creators over to an app or build the type of in-app payment system that encourages a shopping culture.

Similar to Search, TikTok is also not necessarily trying to become the new Amazon, but it is trying to take market share from Meta when it comes to creating a better space for advertisers, stronger commerce opportunities for creators, and leaning into fandoms that build themselves around identities. That last bit is exceptionally key.

RedBird, the Chinese social commerce app that Americans are flocking to in lieu of the looming TikTok ban, is a great comparison. As my friend Ryan Broderick pointed out, TikTok’s systems “have, perhaps inadvertently, been mainly used in the US to create genuinely supportive filter bubbles for young people, for different subcultures, strange fandoms, and all kinds of other communities.

“Something western companies like Meta have not ever been able to crack, possibly because, ironically enough, they aren’t nearly as focused on directly selling you shit, and much more interested in selling you to advertisers.”

I wrote about this a few months ago, but the more that our identities are intertwined with the image we present of ourselves to strangers, the more important the physical objects in the frame of our videos become. Shopping isn’t just about jumping on trends, nor is it about buying necessities (people aren’t buying toilet paper on TikTok or Instagram), but about finding the right creators to connect with by purchasing items that create a sense of belonging to a community through a sense of fandom. It’s social shopping to the most literal degree.

Both TikTok’s search and social commerce businesses emerge as incredibly strong tentacles that support the main business but work in diversifying revenue opportunities and building a new kind of information conglomerate. Having everything in one app turns TikTok from a distraction into a destination, and a destination into necessity.

We are living in the loneliest generation, and although TikTok is not the answer to that problem by any means, not having access to the communities that people find and not having an opportunity to build businesses within those communities, does feel particularly debilitating. Even if, by definition, the fact that people have other places to congregate and shop means TikTok is not a necessity.

But you try to tell your friends that.

Regardless of whether TikTok is banned or not, lessons from the company’s internal conglomerate building strategies, focusing on easy skimming and a one-app solution designed around owned and operated products, are pivotal to understanding the future of information media spaces.

Doubling Down

Although it may seem counterintuitive, sometimes in order to grow you must restrict. It’s a doubling down strategy rather than focusing on land expansion. TikTok didn’t exactly expand into new spaces, it doubled down on its two biggest factors: creators and a powerful algorithm. Search built off tiny niches finding their place on the platform, while social commerce leaned even more into fandoms and special interest communities that were forming on the app. TikTok made it easy for people to do one thing and do it really, really well: feed obsessions.

Instagram is super interesting to me because it arguably has the best targeted ads and its partnerships with Apple and Amazon (one-click purchasing) theoretically should make it the most dominant social commerce app by a mile. All that targeting, however, takes out the subtlety of what incentivized someone to buy something. On Instagram, you feel the effect of targeting. You understand they want you to buy things because Instagram’s business is selling you; even if TikTok is doing the exact same thing, it doesn’t feel as predatory or obnoxious.

TikTok is selling on your behalf. Again, these seem like small differences, but in the eyes of a consumer it goes an incredibly long way. Instagam doubled down on feeling like a giant retailer, TikTok doubled down on letting its creators lead the way, cutting them into the monetization process. YouTube and its shop capabilities will be interesting to watch as TikTok goes dark, as it is the closest to TikTok in that regard. What’s less clear is whether people want to shop on YouTube.

Whether you’re Snapchat, the New York Times, Netflix, Fortnite, Reddit, or any other attention-driven business that may benefit from increased leisure time that more than 270 million Americans will suddenly have, instead of trying to determine what the next area is to expand into in order to replace something that TikTok served, it’s imperative to acknowledge that there is a portion of attention you’ll never capture.

Since you’ll never capture it, you can find new opportunities to double down on the needs, wants, and actions of a current base to find additional value. Does Netflix need games? Probably not. Could Netflix benefit from a trivia or fantasy football-like system that gets people more involved with the main product — the IP — while opening the app more and building connections with friends at a time of increased loneliness and isolation? Maybe. Maybe not.

I don’t have all or even any of the answers, but I do wish that company executives would spend less time trying to figure out how to be something that consumers want that already exists, and focus on how to superserve both casual and super fans by designing new internal businesses that no one else can replicate. TikTok didn’t try to take on Search, it didn’t try to buy a OneMedical, and it didn’t try to build out the company by picking up a communications tool like WhatsApp.

TikTok’s team asked “what are people natively doing that we can make better, and make worth it for us?” As lame as it sounds in 2025, listening to your customer base instead of trying to force something onto your customer base because it’s what others are doing, is the way up in an information empire. Like railroads and real estate, attention is finite. Value is infinite.

TikTok is about to go dark. A quiet will fall like a blanket. Try to listen instead of filling the space with any noise imaginable.