Google is considering acquiring a TikTok competitor

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Google is reportedly considering an acquisition of TikTok-like «Firework,» an app that allows users to make and share 30-second videos with strangers, per The Wall Street Journal. The startup is a US company that was valued at over $100 million earlier this year. Buying Firework would launch Google back into the social space after it shuttered its struggling Google+ social network in April.

TikTok Tops Global Downloads

The acquisition would mark yet another big tech company jumping into direct competition with TikTok — it was revealed last week that Facebook is building a TikTok competitor called «Lasso.» TikTok’s rapid rise has turned heads among global tech companies.
The app boasts over a billion downloads and is hugely popular among younger generations, with over 65% of its users under the age of 30, per App Ape Lab. The company represents a credible competitor in the social space, and Facebook has taken notice: In leaked audio from an internal July Facebook Q&A, CEO Mark Zuckerberg discussed the company’s strategy surrounding Lasso in direct relation to TikTok. Tech giants other than Google and Facebook are interested in getting in on the short-form video craze too, as the ultra-popular Chinese social company Weibo reportedly also wants to purchase Firework.
Google has a specific interest in mitigating TikTok’s influence given that the new app has been positioned as a potential threat to YouTube’s dominance among content creators. Following this year’s VidCon — the digital video conference attended by video creators, industry leaders, and entrepreneurs — some noted creators’ disproportionate excitement about TikTok compared with YouTube.
To that end, it makes sense that the company would like to assuage the threat by providing TikTok-like capabilities for its creators within its own product suite. If Google does purchase Firework, both platforms could benefit from cross-pollination. While the average YouTube video is over 4 minutes long, compared with a 15-second max for TikTok, there is an appetite for shorter content on YouTube: The platform has several popular video playlists and even entire channels that focus on videos under a minute in length, for instance.
It’s not difficult to imagine YouTube promoting Firework videos and playlists through both its recommendations engine and homepage, raising awareness of the platform among its billions of users while keeping all of the engagement within Google’s ecosystem.
Notably, the antitrust scrutiny that Google is currently facing could present a significant hurdle for the company to overcome in purchasing Firework. Google is facing heavy pressure from regulators and lawmakers, ranging from the Department of Justice to a coalition of state attorneys general, investigating it for anti-competitive behavior.
In large part, this pressure is focused on the company’s consolidation through past acquisitions: Google has purchased 270 companies in the past couple decades, of which 171 were competitors, per The New York Times. As such, the purchase of potential a competitor — Firework competes with TikTok, and TikTok is a threat to YouTube — could raise eyebrows among regulators. That said, in spite of these investigations, Google did manage to complete a $2.6 billion acquisition of data analytics firm Looker this summer, making it difficult to tell exactly how regulators might react.

Source: Business Insider Intelligence

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