Meta’s long-running legal battle over its acquisition of Giphy has finally come to an end, with the company agreeing to sell Giphy to Shutterstock for $53 million.
Which is a significant discount on the $400 million that Meta paid for Giphy back in 2020. But then again, as per Giphy’s own argument, GIFs ‘have fallen out of fashion as a content form, with younger users, in particular, describing GIFs as ‘for boomers’ and ‘cringe’.
As a quick recap - back in 2020, Meta announced that it had acquired Giphy, with a view to integrating Giphy’s network of GIF content into its various tools. That deal was then challenged by the UK’s Competition and Markets Authority, due to concerns that it would give Meta an unfair advantage in the digital ads market.
The case went back and forth, with Meta eventually being ordered by the CMA to divest Giphy in October last year – with the ruling coming after Giphy tried to make the case that it was no longer even worth the $400 million Meta was offering, and that no company other that Meta would consider acquiring it.
The CMA’s view was that Meta could use Giphy’s reach to eventually broaden its stranglehold on the ads space, so it slapped it down, which will now see Meta eat a $347 million loss on the canceled deal.
Which, given Meta’s broader financial woes, is just another small part of the bigger picture, and Meta will likely be happy to bring in anything at all for the app. But it’s also a bitter pill to swallow for Zuck and Co., who once envisioned a broader plan for GIF integration and use.
Though, of course, the metaverse has since taken priority, while generative AI is now another big focus, and as Meta continues to cut staff, and refine its priorities, GIFs were never likely to remain a focal element anyway.
At the same time, the argument that GIFs were going to help Meta dominate the ads market always seemed a little weak. But amid broader concerns about its digital ads dominance, it seemed like the CMA felt that it had to make a stand at some stage, with the Giphy acquisition happening to be it.
In terms of practical impacts for users, it probably won’t mean much. Giphy will still be supported via third-party integrations in app – and again, as Giphy itself notes, GIFs aren’t the cultural force that they were when Meta first bought the platform in 2020.
Though maybe Shutterstock will start charging people for GIF use. Maybe, at some stage, Shutterstock will also look to restrict GIF re-publishing, similar to its regular images, in order to monetize them. Though I suspect the biggest benefit for Shutterstock will be via branding, and adding a Shutterstock watermark to every Giphy GIF on the web.
Either way, it’s an end for the Meta/Giphy saga, which, over time, has reduced in relevance.