Musical.ly Sold for $1 Billion

China's Toutiao is buying Musical.ly in a deal worth $800M-$1B

China's Toutiao is buying Musical.ly in a deal worth $800M-$1B

Beijing ByteDance Technology has bought teen social video app Musical.ly for around United States dollars 800 million, Bloomberg reported, citing sources familiar with the deal. Musical.ly has risen to prominence among a teenage and tween audience by enabling users to record quick videos set to music.

The deal is expected to boost ByteDance's presence overseas, adding Musical.ly's around 100 million users worldwide - according to media reports - to Toutiao's 120 million, most of whom are white-collar workers in smaller cities in China. It said the transaction will give it an important USA presence, adding Musical.ly's 100 million lip-synching users to Toutiao's own 120 million readers and viewers, while potentially adding a social media component.

Musical.ly, which launched in Shanghai in 2014 and opened US offices in Santa Monica in 2016, was originally designed as a hub for 15-second goofy videos of users dancing and singing to snippets of popular tunes.

A screen shot from the smartphone app Musical.ly.

The company was purchased by Beijing ByteDance Technology, operator of the startup Chinese news website Jinri Toutiao.

Bytedance, best known for its flagship news aggregator platform Toutiao, is one of China's hottest tech start-ups and was valued at over $20 billion (roughly Rs. 1,30,383 crores) in a funding round earlier this year, Reuters reported in August. It also runs TopBuzz, an English-language news app similar to Toutiao.

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 bringing its artificial intelligence tools to the rest of the world.

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. In February it bought United States video creation app Flipagram.

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