Meta complies with UK order, sells Giphy to Shutterstock at a huge loss
Meta's loss is Shutterstock's gainBy Shawn Knight
In brief: Stock media provider Shutterstock has agreed to purchase Giphy from Meta for $53 million in cash, significantly less than the rumored $400 million it paid for the asset just a few years ago.
Meta has complied with an order from the United Kingdom's Competition and Markets Authority (CMA) to sell Giphy, the search engine for GIFs it acquired in mid-2020.
Meta (then known as Facebook) reportedly paid in the neighborhood of $400 million for Giphy. Almost immediately, the CMA launched an investigation into the acquisition and it didn't take long for them to conclude that the merger would negatively impact social media competition. Facebook was fined $70 million for refusing to cooperate with regulators and ordered to sell Giphy. The social media giant appealed the decision but the CMA's ruling ultimately stood.
Not a whole lot will change behind the scenes on the technical side, however, as the deal includes an API clause that ensures continued access to Giphy content across Meta platforms including Facebook, Instagram, and WhatsApp.
Giphy was founded by Alex Chung and Jace Cooke in 2013, first as a search engine for GIFs. The service proved popular out of the gate and was soon expanded to share GIFs on both Facebook and Twitter.
Shutterstock said Giphy has 1.7 billion daily users that generate more than 1.3 billion search queries daily, and serves more than 15 billion impressions each day through 14,000+ API / SDK integrations.
Shutterstock CEO Paul Hennessy said Giphy will allow them to extend their reach beyond advertising and marketing use cases into casual conversations. According to Shutterstock, GIFs have over 75 percent positive sentiment among consumers. Of course, big brands including Disney, Netflix, NBC, the NFL, and the NBA all use Giphy to inject themselves into these "casual conversations."
Shutterstock doesn't expect Giphy to have much of a financial impact in 2023, although "focused monetization efforts" over the course of 2024 and beyond should change that.
The deal is expected to close in June 2023, pending customary closing conditions.