Facebook, Snapchat Showed Interest In Buying Dubsmash, As Microsoft Moved On TikTok Deal: Report

Facebook Inc FB and the owner of Snapchat, Snap Inc SNAP, discussed purchasing Dubsmash, a micro-video-entertainment app akin to TikTok, Reuters reported Wednesday.

What Happened

Dubsmash was in touch with both the companies on an acquisition deal in recent weeks, according to an unnamed source cited by the Information, Reuters noted. 

The two tech firms are reportedly no longer considering buying the Berlin-based short-form video app. The person revealed that the valuation of the deal -- that didn't materialize -- was in the hundreds of millions of dollars.

“We admire the team but aren’t in active talks to acquire,” a Snap spokesperson told Reuters.

Why It Matters

The efforts to acquire Dubsmash occurred in the backdrop of Microsoft Corporation’s MSFT attempt to purchase ByteDance-owned TikTok.

The Chinese app has 80 million active users in the United States where its business is estimated to be worth between $15 to $50 billion by analysts and bankers.

Facebook earlier this month unveiled Instagram Reels in the U.S. and globally. The feature added to the subsidiary Instagram platform is similar to TikTok, and was earlier tested in several markets, including India, Brazil, and Germany.

The social media giant is facing antitrust investigations into its acquisition of smaller competitors, including Instagram, in the U.S. and Europe.

Price Action 

Facebook shares closed nearly 1.5% higher at $259.89 on Wednesday while Snap shares closed 1.2% higher at $21.86.