Shutterstock Steps Up: Buys Giphy from Meta Platforms
Shutterstock Inc announced on Tuesday that it will purchase animated-images platform Giphy Inc from Meta Platforms Inc for a cash deal of $53 million. This announcement comes several months after Meta, formerly Facebook, agreed to divest Giphy due to competition concerns.
The UK Regulator's Impact on Meta's Business Decisions
Britain's Competition and Markets Authority had previously demanded that Meta sell Giphy last year. Meta could restrict or deny competitors, including Snapchat Inc and Twitter, access to Giphy's content.
Meta's Controversial Acquisition and Subsequent Divestiture of Giphy
Meta purchased Giphy in 2020 for a whopping $400 million. Britain's Competition and Markets Authority later challenged this New York-based company. The success of their campaign marked the first time a US tech giant was compelled to sell a company it had already acquired.
Shutterstock's Stock Surge Post-Announcement
Following the news of the acquisition, shares of Shutterstock saw a significant premarket rise, reaching a 4% increase. The company is planning for the deal to close by next month.
The Potential of Giphy in Shutterstock's Growth Strategy
Despite projecting minimal revenue addition from Giphy this year, Shutterstock intends to intensify efforts to boost revenue from 2024 onwards. Paul Hennessy, CEO of Shutterstock, voiced his enthusiasm for the move, describing it as "an exciting next step in Shutterstock's journey as an end-to-end creative platform."
Giphy's Significant Influence in the Digital World
Giphy holds the record for the world's largest repository of animated images, also known as GIFs and web-based stickers. Its content finds applications on several popular platforms, including Facebook, Instagram, TikTok, and Microsoft Teams.
Its offerings also feature official submissions from major media firms like Disney and Netflix, attracting a staggering 15 billion daily impressions. With the Giphy acquisition, Shutterstock aims to reach approximately 1.7 billion daily users.
