SHANGHAI, U.S. - Shanghai-based Musical.ly, a lip-syncing app that is popular with young people was acquired by Chinese tech giant Bytedance in a deal worth $1 billion.
Musical.ly was founded three years ago and boasts of over 60 million monthly active users.
The app has become the first Chinese social media app to gain popularity in North America and Europe.
The app allows users, called ‘musers’ to record and share 15-second videos of themselves lip syncing to popular songs and making funny faces.
Users can also edit, change the speed of videos, add filters and play videos backwards.
The deal will help both the firms expand their market reach and tap into each other's technological capabilities.
Zhang Yiming, Bytedance's chief executive said, “(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.”
So far this year, Musical.ly has struck deals with Viacom, NBCUniversal and Hearst Magazine to produce original content aimed at younger audiences.
Meanwhile, Bytedance is best known for its mobile app called Jinri Toutiao, or "Today's Headlines," which aggregates news and videos from hundreds of media outlets.
The app has become one of the world's most popular news services and boasts 120 million daily active users.
Yu Xue, an analyst at China-based market intelligence firm IDC said, "For Musical.ly, it is a good price. For Toutiao, it is a big step for its globalisation strategy. The short video market is incredibly hot in China this year.”