Meta has been made to sell Giphy for $53m to Shutterstock.
👉 Background: While GIFs were originally created back in 1987, they really began to take off in the mid 2000's. We're talking Tumblr and early Reddit days, when GIFs almost became a new form of communication.
👉 What happened: Giphy is one of the largest GIF sites on the internet, which Meta acquired for around $400 million USD in March 2020. But now, Meta has sold Giphy for $53m to Shutterstock. Talk about a fire sale!
👉 What else: The UK's competition regulator ordered Meta to unwind the deal because it increased Meta's market power. The fear was that Meta could block rivals from accessing GIFs.
💡An asset's value may not lie solely in its direct commercial potential. For Meta, it wasn't about generating revenue directly - it was about adding to the value proposition of existing services.
💡 Giphy has grown to over 1.7 billion daily users and 15 billion daily media impressions. But its value for Meta was in its ability to enhance user engagement and make their platforms 'stickier'.
💡Given Meta has been forced to sell it, there aren't many other companies that would look at Giphy in the same way... And that's why it received 85% less than what it paid for it.
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