ByteDance acquires Musical.ly for $800 million

ByteDance Technology Co., the company behind giant Chinese media startup Jinri Toutiao, has acquired buzzy teen social video app Musical.ly for about $800 million, according to people familiar with the deal.

The acquisition represents the biggest venture abroad thus far for a Chinese startup valued at $20 billion that’s already spawned one of the world’s largest news services. Bytedance beat out rival bidders including Kuaishou, the viral video streaming service, the people said, asking not to be identified discussing a private matter.

Bytedance announced the deal Friday without citing a price tag. The startup gains a big American 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 and Alex Zhu in 2014, exploded in popularity among American teens in 2016 and has since expanded beyond its flagship app for creating and sharing personal music videos.

In 2016, it rolled out a live-streaming app called Live.ly. The startup’s struck deals with media firms including Viacom Inc. and Comcast Corp.’s NBCUniversal to make original shows. Bloomberg has reported it’s also looking to make interactive content for a younger audience. Hearst’s “Seventeen” magazine has said it’ll devise a slate of shows focused on fashion and beauty for Musical.ly. It’ll continue to run as a separate platform, Bytedance said.

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., Baidu Inc. and Alibaba Group Holding Ltd. 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 $20 billion, according to a person familiar with the matter, on par with Elon Musk’s SpaceX. Started by Zhang Yiming, it’s on track to pull in about $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. It added to the push this week by acquiring aggregation platform News Republic from Cheetah Mobile Inc., which is also an investor in Musical.ly, for $86.6 million.

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ByteDance acquires Musical.ly for $800 million