Meta sells GIPHY to Shutterstock at a loss of $347 million
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Shutterstock announced Tuesday that it will buy animated-image platform GIPHY from Meta for $53 million in cash. The deal is a significant loss for Meta, which had reportedly paid around $400 million to acquire the New York-based GIF search engine in 2020.
This development comes a year after the deal was challenged by the UK's Competition and Markets Authority, which had ordered Meta to sell Giphy over anti-competitive practices. The CMA has been of the opinion that Meta’s acquisition of GIPHY would limit the choice for the British social media users and could kill off competitors such as Snapchat and Twitter, thus reducing innovation in display advertising, said a report by Reuters.
GIPHY has the world’s largest collection of GIFs and stickers, and draws over 1.3 billion search queries daily. It powers over 15 billion daily media impressions.
“This is an exciting next step in Shutterstock’s journey as an end-to-end creative platform,“ said the company’s CEO Paul Hennessy in a statement.
After the deal was announced, which is likely to be finalized next month, Shutterstock’s stock price went up by 4%. The company said that GIPHY will add minimal revenue this year and it will start efforts to increase revenue from 2024.
However, Meta will enter into API agreements with Shutterstock so that it can continue using GIPHY across its platforms. Meta has been a user of GIPHY’s API for years across Instagram, Facebook, Messenger and WhatsApp. The company had acquired GIPHY specifically for it to be a part of Instagram, where a lot of people use GIFs for visual expression and creativity.
“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. 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 further.
Meta has been on the lookout for a buyer for GIPHY ever since CMA blocked the deal and the regulator also had a final say on who the tech giant could sell it to.
Of late, the UK has adopted a stringent stance on antitrust agreements, with the regulator blocking Microsoft’s acquisition of Activision earlier this month.
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