Meta has finally found a willing buyer for Giphy, the animated GIF search engine it acquired for $400 million three years ago.
Shutterstock announced today that it has entered into an agreement with Meta to buy Giphy in a transaction that “consists of $53 million of net cash paid at closing,” meaning Facebook’s parent company has recuperated just 13% of its money. Shutterstock said it 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 announcement comes some seven months after the U.K.’s antitrust authority issued a final order for Meta to sell Giphy, on the grounds that the merger reduced dynamic competition. The Competition and Markets Authority (CMA) had originally ordered the sale way back in November, 2021, but the appeals process held things up for the better part of another year.
In October last year, Meta confirmed it would drop any further appeals and reluctantly agreed to offload Giphy, but 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 — TechCrunch is told that this was likely a six-month window, which meant that the clock was ticking for Meta to conclude a deal.
Conditions of the sale meant that Meta had to sell Giphy as a whole entity, rather than sell it off in pieces, and it had to find a legitimate buyer — a company that would keep Giphy going as a GIF search engine.
The Meta / Giphy acquisition had been catapulted into the limelight again recently, after the CMA confirmed it was blocking Microsoft’s megabucks Activision acquisition at the end of April, a decision that became even more prominent after the U.K.’s European counterpart in Brussels greenlighted the deal three weeks later.
It’s clear that the U.K. has adopted a tougher antitrust stance of late, and while Microsoft’s $68.7 billion bid for Activision is an entirely different kettle of fish — one that likely will have more twists and turns as the case winds its way through the various appeals processes — it does seem like the U.K. is trying to make up for lost time after countless Big Tech acquisitions were ushered through the regulatory approval process more or less without question.
Although Shutterstock has been making moves deeper into the AI realm of late, the New York company’s bread and butter remains good old-fashioned, human-generated, stock imagery. And it’s easy to see how GIFs would fit into all of that. The company said that the acquisition allows it to expand its content library to include GIFs and stickers for advertisers and brands, though it will also help it tap a market it has hitherto not specifically targeted — consumers. The company also said that the deal helps it to bolster its burgeoning “generative AI and metadata strategy.”
“This is an exciting next step in Shutterstock’s journey as an end-to-end creative platform,” Shutterstock CEO Paul Hennessy said in a press release. “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.”