In a notable turn of events, Meta has opted to sell Giphy to Shutterstock for a significantly low price of $53 million. The decision comes as a result of limited interest in GIFs online and regulatory pressure from UK authorities, specifically, the Competition and Markets Authority (CMA), mandating the sale.
Meta originally acquired Giphy for $315 million in 2020, making this transaction a substantial loss of $262 million for the company. The challenge for Meta has been to find a suitable buyer for Giphy during a period when GIFs have become less popular compared to three years ago.
Despite this, the acquisition by Shutterstock presents a fitting future for the GIF library.
Shutterstock has made an official announcement regarding its definitive agreement to acquire Giphy for $53 million. This decision comes after Meta’s acceptance of the ruling by the Competition and Markets Authority (CMA) that required the divestment of Giphy, a process that has taken seven months. The deal is expected to be finalized in June, pending the fulfillment of customary closing conditions.
The acquisition by Shutterstock should alleviate concerns raised by Giphy, as they had advocated for the CMA to impose behavioral regulations instead of mandating the sale of Giphy. The company behind animated images expressed apprehension that the platform, given the perceived decline in the popularity of GIFs since 2020, would primarily attract unsuitable or inappropriate suitors.
Giphy told the CMA in August:
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’.
But fortunately for Giphy, Shutterstock certainly does not find GIFs cringy or for boomers and plans to use them to expand more into customers.
