In an unexpected turn of events, Meta has decided to sell Giphy to Shutterstock for a much lower price of $53 million.
Meta has decided to sell Giphy
The decision was made due to low online interest in GIFs and regulatory pressure from UK authorities, specifically the Competition and Markets Authority (CMA), which mandated the sale.
Meta originally purchased Giphy for $315 million in 2020, resulting in a $262 million loss for the company.
Meta’s challenge has been to find a suitable buyer for Giphy at a time when GIFs are less popular than they were three years ago. Despite this, the acquisition by Shutterstock bodes well for the GIF library’s future.
Shutterstock has officially announced its definitive agreement to purchase Giphy for $53 million.
This decision follows Meta’s acceptance of the Competition and Markets Authority’s (CMA) ruling requiring the divestment of Giphy, a seven-month process.
The transaction is expected to close in June, subject to the fulfillment of customary closing conditions.
The acquisition by Shutterstock should assuage Giphy’s concerns, as they had advocated for the CMA to impose behavioral regulations rather than mandating the sale of Giphy.
The company behind animated images expressed concern that, given the perceived decline in GIF popularity since 2020, the platform would primarily attract unsuitable or inappropriate suitors.
In August, Giphy told the CMA:
User sentiment towards GIFs on social media shows that they have fallen out of fashion as a content form, with younger users in particular describing GIFs as ‘for boomers’ and ‘cringe’.
Fortunately for Giphy, Shutterstock does not consider GIFs cringy or for boomers, and intends to use them to gain more customers.
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