Move over Apple and Google, the next big news efforts to follow are two Chinese news aggregation rivals: Qutoutiao and Toutiao.
Driving the news: Qutoutiao, the 3-year-old news and video aggregation startup backed by Tencent, recently announced that it is receiving a $171 million convertible loan from Chinese tech behemoth Alibaba.
- The company, whose name literally means “fun headlines,” went public in the U.S. last year with roughly 50 million monthly active users and a market value of $2.1 billion.
Why it matters: Tech giants like Alibaba and Tencent are backing Qutoutiao as it pushes to take on Toutiao, a popular news aggregation app owned by ByteDance.
- ByteDance, the Chinese tech company that also owns popular music app TikTok, poses a threat to the dominance in this sector of China's 3 biggest tech firms: Baidu, Tencent and Alibaba.
- Toutiao has become a news aggregation powerhouse in China. The company raised $2 billion in funds at an over $20 billion valuation in 2017. It reportedly has over 200 million daily active users.
Be smart: "It is prudent for both Tencent and Alibaba to invest in Qutoutiao given ByteDance's valuations and progression into the short-form video space," says Humphrey Ho, managing partner at Hylink, China's largest independent digital advertising agency.
- "Qutoutiao accomplishes Tencent and Alibaba's goals without much overlap. ... Qutoutiao would merely be a platform wherein Alibaba and Tencent can drive to their own platforms, similar to how as TikTok is owned by ByteDance."
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