Beijing ByteDance Technology Co (北京字節跳動科技), the company behind giant Chinese media start-up Jinri Toutiao (每日頭條), has acquired teen social video app Musical.ly for about US$800 million, people familiar with the deal said.
The acquisition represents the biggest venture abroad thus far for a Chinese start-up valued at US$20 billion that has already spawned one of the world’s largest news services.
ByteDance beat out rival bidders including Kuaishou (快手), the viral video streaming service, the people said, asking not to be identified discussing a private matter.
ByteDance announced the deal yesterday without citing a price tag.
The start-up gains a big US presence, adding Musical.ly’s 100 million-strong contingent of lip-synching video performers to Toutiao’s own 120 million readers and viewers, while potentially tacking on a social media component to its bread-and-butter news offering.
Musical.ly, founded in Shanghai by Louis Yang (楊陸育) and Alex Zhu (朱駿) in 2014, exploded in popularity among US teens last year and has since expanded beyond its flagship app for creating and sharing personal music videos.
Last year, it rolled out a live-streaming app called Live.ly.
The start-up struck deals with media firms including Viacom Inc and Comcast Corp’s NBCUniversal to make original shows.
Jinri Toutiao — or “Today’s Headlines” — is one of the few Chinese Internet operations to have found success without the backing of one of the country’s three biggest industry players: Tencent Holdings Ltd (騰訊), Baidu Inc (百度) and Alibaba Group Holding Ltd (阿里巴巴).
Now all three are refining their own news apps to try and steal business from Toutiao.
Toutiao aggregates news and videos from hundreds of media outlets and has become one of the world’s largest news services in the span of five years.
Its parent company was valued at more than US$20 billion, a person familiar with the matter said, on par with Elon Musk’s SpaceX.
Started by Zhang Yiming (張一鳴), it is on track to pull in about US$2.5 billion in revenue this year, largely from advertising.
ByteDance wants to become a global success by turning its artificial intelligence tools on the rest of the world.
The company’s overseas efforts are now spearheaded by TopBuzz, an app similar to its core offering in China, and Flipagram, a video platform acquired in February this year.
It added to the push this week by acquiring aggregation platform News Republic from Cheetah Mobile Inc (獵豹移動), which is also an investor in Musical.ly, for US$86.6 million.
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