Toutiao, China’s largest mobile platform for content creation, aggregation and distribution, recently purchased the short video website Musical.ly for USD 1 billion, the largest deal in the history of the short video industry. Toutiao wholly purchased Flipagram, a Los Angeles-based video startup, and News Republic, a mobile news and information platform, this year. The three major acquisitions show Toutiao’s desire to make its platform the world’s number one destination for online content.
Toutiao is owned by Beijing ByteDance Technology Co, Ltd., and it claims to have 120 million active daily users. Investors currently value Toutiao at USD 11 billion, according to CB Insights.
Musical.ly, a lip syncing video app, was founded in Shanghai in 2014 and has been popular with American youngsters since 2016. Users can generate their own short videos and share them with friends. Many young users of this app tend to record 15 second lip syncing clips that they share across social media sites like Facebook, Twitter, and Instagram. The creators, called ‘musers’, can be paid by their followers through the app’s virtual gift programs. The most popular musers have almost 20 million fans as of this year.
It is predicted to bring 100 million users to Toutiao and may add some social media elements to the company’s news content operations.
Flipagram, launched in 2013, is an application for people to upload short storytelling videos. Its app is available in 37 languages, and it boasts users in over 15 countries worldwide. The purchase, which happened in February, helps Toutiao in gaining Flipagram’s music copyright resources, user resources, a large amount of User Generated Content（UGC), as well as its product brand and operations team.
News Republic, a news aggregation platform, used to belong to Cheetah Mobile. Toutiao bought the company for USD 86.6 million on November, 8th. Now, Toutiao benefits from Cheetah Mobile’s large number of global users. News Republic, known as ‘the news agency without journalists’, delivers more than 50,000 pieces of news to each user every day. With its big data and machine learning technology, the company allows users to customize their news feed based on their own interests.
Apart from this, Toutiao owns English-language news app TopBuzz, which ranked first on Google Play’s North American news app download charts in March. Toutiao also bought India’s largest news integration platform, Dailyhunt, in 2016 and controls Indonesia’s famous mobile internet program BABE, a news recommendation platform. In addition, Toutiao has invested USD 50 million in the series B funding round of Live.me, a live streaming platform which is also owned by Cheetah Mobile.
2016 can be seen as a big year for short video, as Toutiao, Miaopai, and Kuaishou entered the field. In 2016, Zhang Yiming, CEO of Toutiao, announced that short video would be the company’s main focus and that Toutiao would provide a RMB 1 billion (USD 151 million) subsidy for short video creators.
Zhang also claimed that expanding global operations would be a significant strategy for Toutiao in 2017 due to the need to attract users from around the world. What’s more, the costs of allocation of capital and information flow have become lower than ever before, making global acquisitions possible.
Currently, Toutiao has expanded into Japan, India, Brazil, North America and Southeast Asia. Due to the three deals it has made this year, Toutiao has become an influential internet company around the world, and it will compete with America’s internet giants in a highly competitive market.
(Top photo from Toutiao)