Shutterstock will acquire Giphy from Meta for $53 million in cash, complying with the UK regulator’s order to divest the animated-images platform due to competition concerns.
Shutterstock, an American provider of stock photography, footage, music, and editing tools, has announced the acquisition of Giphy Inc, the popular animated image platform owned by Meta Platforms Inc.
According to the statement, Shutterstock is acquiring Giphy at an incredible discounted price of $53 million, as Meta had paid $400 million for the platform in 2020. The purchase is being carried out in response to an order from the UK competition regulator, which required Meta to sell the company last year due to concerns about potential access limitations to competition.
Meta’s Losses from the Sale of Giphy Exceed $345 Million
The sale of Giphy is causing Meta multimillion-dollar losses, exceeding $345 million. Reports indicate that the social media giant had been interested in acquiring Giphy for several years, but the company executives were unwilling to sell it as they were in a “significant growth phase”.
Meta failed to leverage the company as expected since the beginning of its acquisition, facing legal problems with regulators due to a possible monopoly. This agreement marks the first time a US technology company is being forced by foreign regulators to sell a company.
As reported by Coinspeaker, despite the multimillion-dollar losses generated by the sale of Giphy to Meta, this has been the best quarter for the company since 2012. Year-to-date, Meta’s shares have increased by over 104%, from $122.30 to $250.47, the current price at the time of writing.
According to Mark Zuckerberg, CEO and co-founder of Meta, the growth of Meta’s shares during Q1 is primarily due to the company’s work in the field of Artificial Intelligence.
Shutterstock to Gains Access to Over 1.7 Billion Giphy Daily Users
The acquisition of Giphy will provide Shutterstock with a significant increase of over 1.7 billion daily users, so the company is content with obtaining “minimal revenue” from Giphy during this year.
However, they plan to implement strategies to improve Giphy’s revenue generation starting in 2024, as the company is known for its vast repository of animated images and stickers used on major social media platforms such as Facebook, Instagram, TikTok, and Microsoft Teams.
Paul Hennessy, CEO of Shutterstock, expressed excitement about the acquisition, considering it an important step in the company’s evolution “as an end-to-end creative platform”.
While the agreement is expected to be finalized next month, Shutterstock’s shares reacted positively to the news, increasing by up to 4% before market opening.
Therefore, this acquisition represents a strategic move by Shutterstock to expand its creative platform by integrating the extensive collection of GIF images and stickers offered by Giphy.