August 2, 2018 / 4:04 AM / in 2 months

China's Bytedance scrubs Musical.ly brand in favor of TikTok

SAN FRANCISCO, Aug 1 (Reuters) - China’s Beijing Bytedance Technology Co plans to announce late Wednesday that it is shuttering the popular Musical.ly video app it acquired for nearly $1 billion in December and will instead move users to a revamped version of its homegrown competitor TikTok.

Musical.ly, released in 2014, and TikTok, launched in 2016, both enable users to create and share short singing and dancing videos that are set to well-known songs.

Although both apps were developed in China, Musical.ly became a sensation among teenagers in the Americas and Europe, while TikTok took off among youth in Asia.

Musical.ly recently reached 100 million monthly active users, according to a press release seen by Reuters on Wednesday. TikTok touted 500 million monthly active users in June.

Bytedance has ridden the success of Toutiao, a news aggregation app, to become one of the most highly valued startups in China’s red-hot tech sector. But the company has faced mounting scrutiny from China’s internet censors, with Toutiao temporarily taken off app stores for a cleanup in April while a separate joke app was permanently shut.

Tik Tok had also been temporarily banned in Indonesia for inappropriate content. It maintains a separate app for China, known as Douyin.

Alex Zhu, co-founder of musical.ly and senior vice president of TikTok, said in the press release: “Combining musical.ly and TikTok is a natural fit given the shared mission of both experiences – to create a community where everyone can be a creator.”

The new app will let users access content from new countries and viewing options that were only available on one of the apps, the company said in the release. Among new features is an alert for when users have spent more than two hours on the app, which is similar to an option social media giant Facebook introduced on Wednesday.

The press release said existing users’ accounts and content would be moved “to the new TikTok app,” which was expected to be available on app stores late Wednesday.

Bytedance said in November that acquiring Musical.ly would help its users and advertisers tap into new markets.

Last month, Musical.ly shut down Live.ly, a live streaming app it had developed prior to acquisition. The company told users to try out LiveMe, a rival app in which Bytedance is an investor. (Reporting by Paresh Dave in San Francisco. Additional reporting by Sijia Jiang in Hong Kong.)

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