Meta, formerly known as Facebook, has had to sell its animated GIF search engine Giphy to Shutterstock for $53 million (£42 million), which is a sharp downturn from the $400 million it initially spent to acquire the company three years prior.
This sale was mandated by the UK’s Competition and Markets Authority (CMA) last year due to concerns regarding market competition.
Giphy is the primary provider of animated GIFs to major social media platforms, including Snapchat, TikTok, and Twitter.
Despite the change in ownership, Meta-owned platforms such as Facebook, Instagram, and WhatsApp will continue to have access to Giphy’s content, according to the terms of the deal.
As the most significant global repository of GIFs and stickers, Giphy experiences more than 1.3 billion search queries daily and reports that its content is displayed approximately 15 billion times.
The CMA originally gave the directive to sell Giphy in November 2021. When Meta initially acquired Giphy, it pledged that Giphy would remain “openly available” to other social networks.
However, a CMA investigation into the acquisition discovered that it could potentially hinder competition in the realms of social media and advertising. This marked the first occasion where the regulator blocked a deal involving a prominent Silicon Valley company.
In September, Meta appealed with the CMA in an attempt to halt the sale. Meta expressed a view that GIFs were becoming less popular as a content format, particularly among younger users, who often associate GIFs with older demographics and deem them as “cringe”.
Despite their disappointment, Meta agreed in October to abide by the CMA’s directive to sell Giphy.
Upon announcing the acquisition, Shutterstock expressed its excitement. CEO Paul Hennessy praised Giphy for enabling everyday users to express themselves using GIF and sticker content and allowing brands to participate in these everyday conversations.
Giphy’s extensive library is regularly updated with original content from individual artists and big-name companies like Disney and Netflix. This ensures a continual influx of fresh content that can be integrated into everyday chats and shared across various social media platforms.