Google Wants to Buy Firework

StockMarketNews.TodayGoogle is weighing a deal for Firework, a free smartphone app for users to share 30-second homemade videos with strangers. Like TikTok, Firework tries to surface viral, edited videos from unlikely sources, though Firework aims for an older audience than its better-known competitor out of China that is big among teens.

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Firework, based in Redwood City, Calif., was valued at more than $100 million in a fundraising round earlier this year, and any acquisition would come at a premium. Google and Firework haven’t yet discussed pricing, the people say. The discussions may not lead to a deal and also include conversations about other ways to partner.

Weibo, China’s version of Twitter, has also expressed interest in Firework, though discussions haven’t moved as far along as those with Google, according to people familiar with the matter. The move comes amid increasing regulatory heat on Google and its peers for their dominance of the technology landscape.

Google, a unit of Alphabet Inc., hit the jackpot 13 years ago by acquiring YouTube and turning it into the top destination for online video. Some 500 hours of new content is uploaded to YouTube every minute, the company says. Analysts say YouTube is responsible for around 20% of Alphabet’s annual advertising revenue.

But the world of online video is expanding further into areas outside of Google and YouTube’s traditional wheelhouse. Short videos shot on mobile phones are becoming the new standard for many users. The popularity of such content is why more than one in seven people on earth have downloaded TikTok to their smartphones.

TikTok’s parent, Beijing-based ByteDance, is valued privately at $75 billion. Google isn’t alone in moving into the short-video space. TikTok’s rapid ascendance in the U.S., particularly among teens, alarmed Facebook executives, who launched a similar app called Lasso in 2018. Snap Inc., too, has rolled out new features.

Part of Google’s motivation, people briefed on the plans say, is to stay ahead of the vanguard. It is considering other acquisitions in the space, too. YouTube executives are involved in the discussions over the potential Firework deal, one of the people says.

Firework was launched last year by former executives from Snap, LinkedIn and JPMorgan Chase & Co. The company says on its website that millions of people have downloaded the app to share videos like extreme mountain biking and guitar-instruction tips. By contrast, YouTube says it has two billion monthly users. Firework earlier this year raised around $30 million from venture-capital firms including IDG Capital, GSR Venture and Lightspeed Venture Partners China.

Firework promotes itself as closely aligned with major phone manufacturers in developing features specifically for their hardware. Videos taken on Apple’s iPhone, for instance, can show footage shot from both the handset’s front and rear-facing cameras at the same time.

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