Meta finally has a buyer for Giphy that the UK watchdog is forcing it to sell. However, the sale of the Giphy business to Shutterstock is depressing for the Facebook parent company as it will only pass it for only $53 million despite purchasing it for $400 in 2020.
Seven months ago, Meta received bad news from United Kingdom’s Competition and Markets Authority, forcing it to divest Giphy due to competition concerns claiming that it could improperly boost Meta’s market power. Now, Shutterstock announced that it is buying Giphy, but not anywhere near the amount it was originally purchased by Meta. The company’s reported $53 million current purchase amount is a huge discount compared to how much Meta paid for it in 2020. Even more, it is not even half of Giphy’s 2016 $600 million valuation. No other reasons are known to explain this huge price slash, but it is undeniably a huge blow for Meta.
On the other hand, despite this huge price decrease, the acquisition won’t deliver an abrupt success for Shutterstock. As per the company, “GIPHY is expected to add minimal revenue in 2023 with focused monetization efforts taking place over the course of 2024.” Nonetheless, Shutterstock plans to use the buyout to beef up its offerings by including GIFs in the future. In its announcement, the company detailed the strategic and financial highlights of the deal, including extending its API ecosystem to include GIPHYs and using it to augment its generative AI and metadata strategy.
“This is an exciting next step in Shutterstock’s journey as an end-to-end creative platform, “said Shutterstock CEO Paul Hennessy. “Shutterstock is in the business of helping people and brands tell their stories. Through the GIPHY acquisition, we are extending our audience touch points beyond primarily professional marketing and advertising use cases and expanding into casual conversations. GIPHY enables everyday users to express themselves in memorable ways with GIF and sticker content while also enabling brands to be a part of these casual conversations. We plan to leverage Shutterstock’s unique capabilities in content and metadata monetization, generative AI, studio production and creative automation to enable the commercialization of our GIF library as we roll this offering out to customers.”