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Earlier this week, China-based content aggregation platform Toutiao announced that it had purchased mobile video platform Flipagram on undisclosed terms. Toutiao, which has 175 million monthly active users (MAUs), said it would tap into Flipagram’s user base by showing videos produced on the platform to its own audience. The purchase is a strategic investment that gives Toutiao a presence in the US; Flipagram will retain its US offices and remain independent of its new owner.
Founded in 2012, Toutiao initially focused on news aggregation, but has since expanded its content to include offerings like videos and celebrity gossip. The company is quick to tout its use of machine learning software that recognizes a user’s preferences, then adjusts the content that user sees to cater to their specific interests. The approach has been successful for Toutiao, which reports that users spend an average of 76 minutes per day on the service.
According to the China Internet Network Information Center (CNNIC), reading or watching the news is one of the most popular mobile activities in China. CNNIC’s research showed that more than eight in 10 mobile internet users access the news on their devices, behind just instant messaging and search engines in terms of reach.
And Toutiao is the most popular news app in the country, Cheetah Mobile's Cheetah Global Lab found, with 13.8% reach among mobile internet users—3 percentage points above Tencent’s news app (the parent company of WeChat).
Flipagram—one of the earliest social platforms that let users combine video, music and text to create their own short videos—never gained widespread traction in the US, even after attempts by the company to turn it into more of a social network. Re/code reported last March that Flipagram had 36 million MAUs.
Another problem Flipagram faces is that many aspects of its feature set are now available on Instagram and Snapchat, both of which are significantly more popular platforms.
Nevertheless, Toutiao has access to a new pipeline of content with Flipagram, and in turn, Flipagram will be able to tap into its new parent company’s ability to personalize content. But it remains to be seen whether that will be enough to give Flipagram a leg up over its formidable competitors in the US. On the other side, Toutiao now has a patch of ground on which to stand in the US, which could serve as a launching point into the market.
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