Shutterstock will acquire Giphy from Meta for $53 million in cash, complying with the UK regulator’s order to divest the gif platform over competition concerns.
Shutterstock, an American company that provides photography services, stills, music, and editing tools, has announced the acquisition of Giphy Inc., the popular motion picture platform owned by Meta Platforms Inc.
According to the release, Shutterstock is acquiring Giphy at an incredible discount of $53 million, as Meta paid $400 million for the platform in 2020. The purchase is being made in response to a request from the UK competition regulator, which required Meta to sell the company last year over concerns about access restrictions. potential for competition.
Meta losses from the sale of Giphy exceeded $345 million
Giphy’s sale caused multi-million dollar losses of over $345 million. Reports indicate that the social media giant has been interested in Get Giphy for several years, but company executives were unwilling to sell it because it was in a “significant growth phase”.
Meta failed to capitalize on the company as expected from the outset of the acquisition, running into legal troubles with regulators over a potential monopoly. This agreement is the first time that foreign regulators have forced a US technology company to sell a company.
As reported by Coinspeaker, despite multimillion-dollar losses resulting from the sale of Giphy to Meta, this quarter was the company’s best since 2012. To date, Meta shares are up more than 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, Meta’s stock growth during the first quarter was mainly due to the company’s work in the field of artificial intelligence.
Shutterstock to reach over 1.7 billion daily Giphy users
The Giphy acquisition would provide Shutterstock with a significant increase of over 1.7 billion daily users, so the company is content to take “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 GIFs and stickers used on major social media platforms such as Facebook, Instagram, TikTok, and Microsoft Teams.
Shutterstock CEO Paul Hennessey expressed his excitement about the acquisition, seeing it as an important step in the company’s evolution as a “one-stop creative platform.”
While the agreement is expected to be finalized next month, shares of Shutterstock reacted positively to the news, increasing as much as 4% before the market opened.
Therefore, this acquisition represents a strategic move by Shutterstock to expand its creative platform by integrating the wide range of GIFs and stickers Giphy has to offer.
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