Meta Sells GIPHY To Shutterstock, Reportedly Taking A Big Loss In The Process
Online stock-photo giant Shutterstock announced today that it's acquiring Giphy (stylized as "GIPHY") from current owner Meta in an all-cash deal worth $53 million. Reportedly, Meta paid approximately $400 million to acquire Giphy in 2020, so the sale to Shutterstock represents a significant monetary loss.
Meta had little choice in the matter, however, after the United Kingdom's Competition and Markets Authority (CMA) ordered Meta to divest Giphy in 2022, citing anti-competition concerns in the sector. For example, the potential that Giphy would favor supplying content to Meta's own Facebook and Instagram platforms over competitors like Twitter and Snapchat. The forced sale followed a $69.6 million fine levied by the CMA for Meta's pursuit of the Giphy acquisition without regulatory approval.
Giphy bills itself as the world's largest database of animated images and web-based stickers, primarily used in social media and messaging apps. According to Shutterstock, the company receives more than 1.3 billion search requests per day, resulting in 15 billion daily impressions.
GIPHY will remain compatible with Facebook and Instagram
The Shutterstock acquisition shouldn't noticeably affect Meta's social network users. As a condition of the sale, Facebook and Instagram will have continued access to Giphy's content, alongside other social media like Twitter or Snapchat. Giphy's content library consists of work contributed by individual artists, as well as media partners such as Disney and Netflix.
Traditionally associated with commercial customers, Shutterstock boasts that acquiring Giphy "expands Shutterstock's content library to include GIFs and stickers used in more casual conversations," and that GIFs remain popular among social media users.
You know that feeling when you find the perfect reaction GIF? That's going to be us all the time now that @GIPHY is officially a part of Shutterstock. Also, is it pronounced GIF or JIF? Asking for a friend. 👀
Check out the deets here! https://t.co/z0TSecFx5W pic.twitter.com/EvQVqFilHp
— Shutterstock (@Shutterstock) May 23, 2023
The deal is said to close in June 2023, pending any unforeseen delays. According to Shutterstock, "GIPHY is expected to add minimal revenue in 2023 with focused monetization efforts taking place over the course of 2024." Those monetization efforts will likely take form as an increase in the number of animated images available in Shutterstock's offerings to subscribers. Shares of Shutterstock (SSTK) were up approximately 2% immediately following the announcement.