In a recent turn of events, Meta, formerly known as Facebook, has sold its animated GIF search engine, Giphy, to Shutterstock for a sum of $53 million. This comes after Meta’s acquisition of Giphy three years ago for a whopping $400 million.
The Deal: Meta Sells Giphy to Shutterstock
Shutterstock announced its agreement with Meta to purchase Giphy, a deal that consists of $53 million of net cash paid at closing. This means that Meta has recuperated just 13% of its initial investment. Shutterstock expects the deal to close next month, with Meta also signing a commercial agreement to continue accessing Giphy’s content across its product suite.
The Backstory: UK’s Antitrust Order
The sale comes seven months after the U.K.’s antitrust authority issued a final order for Meta to sell Giphy. The Competition and Markets Authority (CMA) had originally ordered the sale in November 2021, but the appeals process delayed the sale for almost a year. Meta confirmed last year that it would drop any further appeals and agreed to offload Giphy. The formal divestment process didn’t start until the CMA issued its final order in January this year, which gave Meta a set period of time to sell its asset.
Shutterstock’s Strategic Acquisition
Shutterstock has made it clear that acquisitions were going to play a major part of its near-term roadmap. The company’s goal was to extend into different content types. So, the situation with Giphy could not have come at a better time for Shutterstock, providing the opportunity to buy a popular GIF platform at a reduced price. The company also said that the deal helps it to bolster its burgeoning “generative AI and metadata strategy.”
What’s Next for Giphy?
With the acquisition, Shutterstock plans to expand its content library to include GIFs and stickers for advertisers and brands. It also aims to target a market it has not previously targeted — consumers. The company plans to leverage its unique capabilities in content and metadata monetization, generative AI, studio production, and creative automation to enable the commercialization of its GIF library.
