Shutterstock to Acquire Giphy from Meta Amid Regulatory Pressures
by FARUK IMAMOVIC | VIEW 577
American photo platform Shutterstock made headlines this Tuesday, revealing plans to acquire animated image platform Giphy from Meta. The deal, valued at $53 million in cash, comes amid a backdrop of regulatory scrutiny and pressures from international competition watchdogs.
The sale marks a notable turning point, occurring just months after the Facebook parent company initiated the divestiture of Giphy, spurred by rising concerns over market competition.
The Regulatory Hurdle: A Brief Background
In a noteworthy move last year, Britain's competition regulator, the Competition and Markets Authority (CMA), directed Meta to sell Giphy.
This action stemmed from fears that the company could potentially restrict or limit access to Giphy’s expansive content for competing platforms such as Snapchat and Twitter. Meta's initial acquisition of Giphy dates back to 2020 when the tech giant shelled out a hefty $400 million for the New York-based company.
However, just a year later, the CMA challenged this purchase, a dispute that culminated in a historic regulatory victory. For the first time, an American technology behemoth was forced to divest a previously acquired entity under the weight of regulatory action.
Shutterstock: A New Home for Giphy
The acquisition of Giphy by Shutterstock ushers in a new era for both companies. Expressing enthusiasm for the purchase, Shutterstock’s Chief Executive, Paul Hennessy, shed light on the unique value Giphy brings to the table.
"Giphy enables everyday users to express themselves in memorable ways with gif and sticker content," Hennessy said, "while also enabling brands to be a part of these casual conversations." Giphy, known for its world's largest archive of animated images, or GIFs, as well as web-based "stickers", is a significant player in the social media landscape.
It's content is ubiquitously used across various platforms, including Facebook, Instagram, TikTok, and Microsoft Teams. The acquisition by Shutterstock presents an opportunity for the company to strengthen its position in the digital media space, with Giphy's wide array of user-generated content providing a robust supplement to Shutterstock's existing offerings.