Brief:

• ByteDance, parent company of TikTok, launched an internet search engine for the Chinese market as part of a broader expansion beyond its core business in news and video, Reuters reported. The domain for the service called Toutiao Search is within ByteDance's flagship product, the Chinese news aggregator Jinri Toutiao.
• While ByteDance hasn't yet commented on the new service, it said on social media last month that it was recruiting people for team for the search engine after previously hiring technical experts from rivals Google, Baidu and Bing. The company said the search engine will offer censored results and content from its apps like Jinri Toutiao and the Chinese version of TikTok, in addition to other websites.​
• ByteDance was valued at $78 billion in a 2018 financing round, making it the most valuable tech startup worldwide.

Insight:

Toutiao Search positions ByteDance to compete more directly with Baidu, the most popular search engine in the tightly controlled Chinese market. Baidu is responsible for 52% of desktop searches and 88% of mobile searches in the country, according to market researcher StatCounter.

Baidu has dominated China since 2010, when Google withdrew from the country after refusing to comply with a government request to censor search results. Like Baidu, ByteDance's Toutiao shows filtered search results, per Reuters.

By launching a search engine, ByteDance seeks to parlay its popularity in news and video services into a potentially lucrative market for search advertising. Douyin, a competitor, was said to have 300 million users last year, giving ByteDance a broad platform for cross-promoting its search engine.

As Bloomberg notes, most people in China don't use search as a standalone service outside of apps, which means ByteDance is unlikely to create a platform that's independent of its apps. By incorporating search capabilities into existing mobile platforms, the company can let users browse related news, information or products while giving them one less reason to leave the ByteDance ecosystem and visit rivals like Baidu.

Expansion into search comes amid ByteDance's ambitious plans to monetize popular apps like TikTok and sell mobile devices. TikTok was the most downloaded app in Apple's App Store for five straight quarters, analytics firm Sensor Tower found.

TikTok's popularity stems from features that urge creative collaboration among users and leverage artificial intelligence to identify entertaining videos that spark virality. Brands have begun to notice TikTok and develop marketing campaigns for the platform. Chipotle Mexican Grill, GrubHub, Guess, Sony Pictures and Uniqlo have all made TikTok a centerpiece of promotions in the past year.