Facebook sells Giphy - not voluntarily - at a huge loss
Purchased for 315 million US dollars, sold for 53 million. Facebook parent company Meta has sold the portal for animated gif images and short videos. The British competition authority had ordered the sale.
It was a short and expensive intermezzo for Meta: only around three years ago, Facebook announced that it would be taking over the most widely used animated image service. The value of Giphy was estimated at 300 to 400 million US dollars at the time. Neither Facebook nor Giphy provided details of the exact purchase price at the time, but it is rumoured that Mark Zuckerberg's company paid 315 million US dollars.
However, the British Competition and Markets Authority (CMA) already made itself known in November 2021. The merger of Facebook and Giphy would risk making it more difficult for Meta's competitors on its own platforms - i.e. Facebook, Instagram and WhatsApp - to integrate images from Giphy. The CMA argued at the time that it could not be ruled out that Tiktok, Twitter or Snapchat would no longer be able to easily integrate images from the Giphy database. They could be forced to share user data with Meta.
Surprisingly, Meta took a different view. This led to a legal dispute between the competition authorities and Meta. The proceedings ended in autumn 2022. CMS prevailed and Meta had to sell Giphy again.
The fact that the whole world now knew that Meta was forced to sell Giphy played into the hands of potential buyers. In the end, the photo database Shutterstock secured Giphy - and only paid 53 million US dollars.
A painful loss for Meta
The accounting loss of around a quarter of a billion from the Giphy sale should be easy for Meta to swallow. The profit reported for 2022 was over 22 billion US dollars. In the fourth quarter of last year, a surplus of USD 4.65 billion was reported - despite high costs for severance payments for thousands of employees that Meta parted with.
With a purchase price of over 300 million US dollars, Giphy was one of the more expensive acquisitions in recent years. Only the acquisition of Kustomer, a supplier of cloud-based customer management systems, was more expensive. Meta paid USD 1 billion for this US company in 2022. Incidentally, the same amount as in 2012 for Instagram. In 2014, 19 billion dollars were paid for WhatsApp and two billion dollars for Oculus VR.
Giphy in new hands
Why has a photo platform of all things now secured Giphy? For Paul Hennessy, CEO of Shutterstock, this is logical in his statement. In the best business language, he states: "The acquisition is an exciting next step in Shutterstock's journey as an end-to-end creative platform." After all, Giphy records 1.3 billion daily search queries, according to its own figures.
If you use Giphy a lot, you don't have to worry. You can continue to decorate your communication with the popular GIFs - even on Facebook platforms. That's because the meta group has been assured that it can continue to use Giphy's content as part of the compulsory sale.
Cover photo: Martin Jungfer
Journalist since 1997. Stopovers in Franconia (or the Franken region), Lake Constance, Obwalden, Nidwalden and Zurich. Father since 2014. Expert in editorial organisation and motivation. Focus on sustainability, home office tools, beautiful things for the home, creative toys and sports equipment.