Meta forced to sell Giphy, takes 87% loss in Shutterstock deal
Zuck and Co face Brexit bonus
Meta's Giphy days have come to an end, with the stock photo platform Shutterstock today announcing plans to buy the GIF library for a mere fraction of what the company formerly known as Facebook paid for it.
Shutterstock announced its $53 million (£42.6m) acquisition - far less than the $400 million (£322m) Meta paid for it in 2020 - in a press release in which it said it plans to use Giphy to extend its reach beyond professionals looking for stock photos and "into casual conversations."
"This is an exciting next step in Shutterstock's journey as an end-to-end creative platform," said Shutterstock CEO Paul Hennessy. "We plan to leverage Shutterstock's unique capabilities in content and metadata monetization, generative AI, studio production and creative automation to enable the commercialization of our GIF library as we roll this offering out to customers," Hennessy added.
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Meta, which uses Giphy to serve animated snippets to its users for use in posts, replies and DMs, plans to enter into an API agreement with Shutterstock. That will put it on similar grounds as Snapchat, TikTok and Twitter, all of whom use Giphy APIs to serve GIFs to users.
We asked Shutterstock several questions about its purchase of Giphy, such as whether it intended to paywall any of Giphy's features and additional monetization details, but didn't immediately receive a response.
Shutterstock subsidiary Giphy, reporting as ordered
Meta's, then Facebook's, acquisition of Giphy, which it just sold for 13 percent of what it paid for it, was in trouble almost as soon as it was announced, with the UK's Competition and Markets Authority (CMA) demanding answers as to what would come of such a sale a month after Meta announced it.
The social giant carried on with its integration of Giphy despite the CMA's objections. The competition watchdog said in August 2021 that it was worried Meta would pull Giphy from competing platforms, and that it would remove a source of competition from the online advertising market if Meta continued on its path.
Facebook claimed at the time that the CMA's decision was based on "fundamental errors." The CMA then fined Facebook for not assisting it in its probe of the social media company, and followed up with a second investigation that turned out largely the same as the first. Facebook appealed on the grounds that the CMA failed to disclose Zuckercorp competitor Snap was interested in buying Gyfcat, a Giphy competitor.
The CMA restarted its investigation but came to the same general conclusion late last year: Facebook had to sell the GIF platform to prevent it from accumulating even more influence on markets.
Meta assented to the CMA's decision in October 2022, saying it would sell the company as ordered. Fast-forward seven months, and that sale has finally arrived.
We reached out to Meta to get its take on the sale, but it said it had nothing new to add, only referring us back to what the company said in October when it caved to the CMA, expressing disappointment but agreeing to the terms of sale imposed by the UK regulator.
"We are grateful to the GIPHY team during this uncertain time for their business, and wish them every success. We will continue to evaluate opportunities - including through acquisition - to bring innovation and choice to more people in the UK and around the world," Meta reiterated to us.
Shutterstock said it expects the deal to be finalized next month; Deliberations on whether GIFs are cringe are ongoing. ®