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Instagram debuts new short-video reels to compete with TikTok

Yahoo Finance’s On The Move panel weigh in on the latest stories making headlines.

Video Transcript

JULIE HYMAN: Instagram has unveiled Reels, which is its answer to TikTok. Is it a viable one, Dan Howley?

DAN HOWLEY: I mean, look, it could be. I don't know if the creators who are on TikTok are willing to move off of the platform to Instagram. Instagram has a much larger base, but that doesn't necessarily mean that people want to take up and resettle on a new platform. I think the big thing here, though, is that it's just essentially a copy and paste of what TikTok has done for Facebook.

And This is exactly out of their playbook, and it's exactly what they're being investigated for through the congressional hearings, through the DOJ, through state attorney general. And that's really, I think, an issue that Facebook should have kind of held back on, maybe, until these investigations are completed. But that's exactly what they're doing here.

Reels is probably going to be a success, just like Instagram Stories was. I don't think it's going to crush TikTok, though.

- Yeah, Howley, that's a good point. And if you look at the marketing video and campaign that Reels or Instagram actually put out, they're all TikTok stars, right? These are not new, homegrown talent that they're discovering. They're basically poaching people from TikTok.

I actually spoke with a source familiar with TikTok saying that there are at least three or four other large companies in addition to Microsoft that are in the bidding process. So from TikTok's vantage point, I do not think Reels is the real existential threat. As we know, the potential Microsoft acquisition, trying to deal with its parent company ByteDance in China-- that's a much larger, pressing issue for them and their chance of survival and thriving here. I don't think they're necessarily paying much attention to Reels right now.

JULIE HYMAN: Yeah. I'm also going to wait to see if some of the Instagram folks I follow-- if they start making Reels rather than just pulling people over from TikTok. We shall see. Facebook shares, by the way, not doing much of anything.