Google reportedly spends $100 million on avatars to take on TikTok

 Google may be struggling with its ad business right now and focusing more on hardware, but it also seems willing to spend nine figures to acquire an AI-powered photography business that specialises in creating avatars. That allegedly recently occurred, according to a source with knowledge of the situation.

According to that source, the company is called Alter and cost $100 million. Google later acknowledged the transaction but provided no other information. The agreement, which was finalised "around two months ago," is expected to support the company's ambitions to take on TikTok. Without specifically mentioning the transaction, former Alter COO Jonathan Slimak revealed in September that he would be beginning a new post at Google on LinkedIn.

In 2020, Alter debuted as Facemoji, a company that sold plug-and-play avatars on social media and gaming platforms. One company that contributed $3 million in startup money was Twitter.

Snapchat provides dedicated full-body avatars called Bitmoji in addition to face-mapped filters and avatars, while Facebook and Instagram have comparable options. Given that TikTok is being targeted, Google may be enabling avatars on its YouTube Shorts platform as well, though it's unclear if Google is only trying to catch up with TikTok with such a move.

With Alter, Alphabet has made its ninth significant acquisition of the year; back in February, we also covered Google's acquisition of micro-LED manufacturer Raxium.