The only Chinese social-media company to build a major network outside China will be taken over by a fast-growing Chinese upstart.
Lip-syncing app Musical.ly has been sold to Chinese news firm Bytedance, reportedly for as much as $1 billion.
The deal represents the largest venture for Toutiao since its 2014 startup and gives it an global presence. Bytedance beat out viral video streaming service Kuaishou to get Musical.ly, the sources added.
Financial details weren't disclosed but Bloomberg estimates $800M while The Wall Street Journal has the potential price as high as $1B.
Last year, it rolled out a live-streaming app called Live.ly. Hearst's "Seventeen" magazine has said it'll devise a slate of shows focused on fashion and beauty for Musical.ly.
"[By] integrating Musical.ly's global reach with ByteDance's massive user base in China and key Asian markets, we are creating a significant global platform for our content creators and brands to engage with new markets", Zhang Yiming, ByteDance's CEO, said in a statement. It also runs TopBuzz, an English-language news app similar to Toutiao.
Toutiao has become one of the world's largest news aggregators since its 2014 startup.
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, Toutiao is on track to make about Dollars 2.5 billion in revenue this year, largely from advertising.
The Musical.ly app, developed in China, is popular globally with teenagers and offers karaoke-style videos. 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 US$86.6 million.
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