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Facebook to Take TikTok Rival Global

Facebook (NASDAQ: FB) will go global with its answer to TikTok. The alternative product, called Instagram Reels, allows users to make 15-second video clips set to music. This comes when Facebook has just shut down Lasso, the app seen as Facebook's answer to TikTok.

The tech giant first launched Instagram Reels in Brazil in November. It subsequently took this product to both France and Germany in June. Now, it prepares to take Instagram Reels global as it likely looks to seize an opportunity.

TikTok, the video-sharing product built by China-based ByteDance, has come under scrutiny in recent weeks. Due to its ties to China, the U.S. government perceives the app as a potential security risk. Secretary of State Mike Pompeo has talked about banning, or at least limiting, the use of TikTok.

Moreover, India, a country where TikTok had become popular, blocked the app over a border dispute with China. Facebook quickly responded by launching Instagram Reels in that country soon after.

Man and woman sharing video clips via their smartphones.

Image source: Getty Images

According to marketing agency Omnicore, TikTok has 800 million users worldwide, including an estimated 26.5 million monthly active users in the U.S. Still, with more than 3 billion users across its apps, Facebook remains the dominant social media company.

Facebook has also had a history of copying the services of smaller rivals. Snap suffered a blow when Facebook and Instagram copied key features. Moreover, with more than $69 billion in available liquidity, Facebook holds considerable resources to invest in such a venture. 

Between Facebook's power in the industry and the potential pressure on TikTok coming from the U.S. and other governments, Instagram Reels could become the new leader in music video clips.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.

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