Giphy Sold To Shutterstock At A $260 Million Loss
Online stock photo marketplace Shutterstock announced Tuesday it would acquire Giphy from Meta for $53 million. The deal is s significant loss for Meta, which acquired Giphy in 2020 for $315 million. The acquisition comes a year after the United Kingdom’s Competition and Markets Authority required Meta to divest the smaller company.
The regulatory body cited that the acquisition will reduce competition in the online advertising and social media markets. This issue shows more countries maintain their free markets by clamping down on potential monopolies. It is a great opportunity to glimpse how the corporate landscape is shifting.
This article will discuss why Meta Platforms sold Giphy to Shutterstock. Later, I will cover other significant decisions from similar tech companies. I will also discuss what Shutterstock plans to do with Giphy.
Why did Meta sell Giphy?
I will explain what these companies offer before I continue. Meta Platforms or Meta is well-known as the creator of Facebook and Twitter. Shutterstock is an online stock image marketplace, and Giphy offers GIFs.
Also known as Graphics Interchange Format, these are short animations used in online chatrooms. On October 2022, the Competition and Markets Authority said Meta must divest. It cited the risk of significantly reducing competition in display advertising and social media markets.
Specifically, the CMA said Meta controls nearly half of the UK’s £7 billion ($7.9 billion) display advertising market. Also, it might eliminate Giphy’s ambitions in digital advertising.
The regulatory body stated Meta’s purchase of Giphy would have limited other social media firms from accessing the platform’s GIFs. As a result, Meta would take over their users.
You may also like: Apple Moving Forward On App Privacy
Hence, the regulatory body said Meta must “sell Giphy, in its entirely, to a suitable buyer.” In response, a Meta spokesperson said the company felt “disappointed by the CMA’s decision but accept [the] ruling as the final word on the matter.”
“We will work closely with the CMA on divesting GIPHY,” he added. On August 2023, Giphy downplayed the significance of Meta’s takeover with these unusual statements:
- Marketplace commentary and user sentiment towards GIFs on social media shows that they have fallen out of fashion as a content form, with younger users, in particular, describing GIFs as “for boomers” and “cringe.”
- Content creators are also finding less value in GIFs, with GIPHY experiencing a drop in total GIF uploads between October 2020 and May 2022.
What does Shutterstock plan with Giphy?
A year later, Meta found a buyer, Shutterstock. CEO Paul Hennessy said the deal was “an exciting next step in Shutterstock’s journey as an end-to-end creative platform.”
“Through the Giphy acquisition, we are extending our audience touch points beyond primarily professional marketing and advertising use cases and expanding into casual conversations,” he added.”
“Giphy enables everyday users to express themselves in memorable ways with gif and sticker content while also enabling brands to be a part of these casual conversations.” Also, Shutterstock will increase its API ecosystem with Giphy’s 14,000 API/SDK integrations.
As a result, it will gain 1.7 billion daily making more than 1.3 billion daily searches and 15 billion media impressions. Those include the Giphy website and the app.
You may also like: How To Use Meta’s Animated Drawings Tool
The NYC online image firm will also add new partners. After all, Giphy has integrations with numerous tech platforms like Microsoft Teams, Slack, TikTok, and SnapChat.
It partnered with media outlets like Netflix, NBC, Disney, and the NFL. Soon, Shutterstock hopes to boost its advertising and marketing potential with Giphy.
The latter will enable consumers to share relevant GIFs and stickers in “casual conversations.” Also, Henessy explained his company would use generative AI and other technologies to realize this vision.
Meta recently sold the GIF platform GIPHY in compliance with the UK Competition and Markets Authority. The latter explained the acquisition would negatively impact competition in the social media market.
Meanwhile, Shutterstock is glad to add GIPHY to its services to improve its advertising and marketing capabilities. Also, the company’s stock rose by 2% following the purchase.
The divestment is the first time a global regulator blocked a Big Tech firm’s completed deal. Moreover, the CMA wants to become a greater force in regulating the growing digital market.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.