Google plans to acquire video-sharing app to challenge TikTok

Google plans to acquire video app Firework, according to a Wall Street Journal report. Similar to the hugely popular TikTok, Firework also allows users to create and share short videos.

Redwood City, Calif.-based Firework bills itself as “the future of social mobile TV” and was last valued at $100 million in a fundraising round earlier this year. Chinese tech company Weibo has also reportedly considered acquiring Firework, although talks haven’t progressed as far as those with Google.

It’s likely that an acquisition from any company, including Google, would have a premium. People familiar with the situation say Google and Firework did not discuss pricing.

TikTok, owned by Chinese tech company ByteDance, has quickly transformed into one of the most popular social networking apps in the world, especially among younger users. According to data from app intelligence firm SensorTower, TikTok was the fourth most downloaded app in the second quarter of 2019, behind only three Facebook-owned apps (WhatsApp, Messenger and Facebook). ByteDance has reportedly been privately valued at $75 billion.

But competitors have taken notice of TikTok’s success. Facebook is testing a similar offering, Lasso, in select markets. Facebook CEO Mark Zuckerberg said he thinks of TikTok as “Explore for Stories,” referring to Instagram’s “Explore” feature. Snap has also experimented with adding TikTok-style features.

The Wall Street Journal reports that Google’s motivation is to “stay one step ahead,” while also exploring other potential acquisitions in the video app space.

TikTok is quickly proving to be an interesting challenge for Google-owned YouTube. TikTok has been able to capture some of its most popular YouTube creators to embrace its platform, while creating its own breed of stars. At this year’s VidCon, which is usually dominated by YouTube personalities, TikTok stars “stole the show”. YouTube executives are said to be involved in talks with the acquisition of Firework.

It’s likely that Google, fearful of a potential competitor to its video-sharing platform, wants to offer its creators an alternative, potentially with a way for creators to get paid for their content. At this time, TikTok does not share revenue with creators.

Google could also use its scale to give Firework an unprecedented level of awareness and distribution globally – with the exception of China, a market in which Google has largely stayed away and which TikTok dominates.

Shirley K. Rosa