Meta Sold GIPHY at a Huge Loss After Regulatory Pressure, But... Downloads Tell another Story
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Are you into gifs? If so you must know Giphy, the search engine for gifs. A few short years ago Facebook's Meta bought Giphy, something most people don't realize and for a good reason - Meta didn't really do anything with it.
Meta finally decided it was time to let go and sold Giphy to Shutterstock this week. A new home where it could probably offer more value. That + the UK government really didn't want the original sale to go through...
What's interesting here is the price Meta paid and then received - interesting because they bought high and sold looooow.
Meta paid a whopping $315M for the engine and sold it for just $53M. And no, I didn't forget a 0.
Given where Giphy is going its not inconceivable that Giphy will disappear as a service and get bundled into Shutterstock's platform. Which begs the question - is Giphy even used anymore?
Looking at downloads the answer is no more than a grunt. Going back to 2021, Giphy saw roughly 200K downloads every week. That's while it was in Meta's hands. But that 200K dropped to 180K, and within a few weeks 160K, and by the end of 2021, Giphy was averaging around 110K downloads, according to our estimates.
2022 wasn't kind to Giphy either. Over the year, weekly downloads dropped to just 80K. And 2023 was even worse. Weekly downloads dropped to around 60K in April. That's a 70% drop.
To answer my question with words this time - Giphy is used but growth is completely gone and given another year or so it could drop so low it will be gone as well.
That's why Meta had to let it go, even at a huge loss.
And before you jump at me to say Giphy is already integrated into a bunch of services like Slack so the app isn't a true proxy - I know, but when you look at the trend and consider the drop, I think it's safe to say it does.
This acquisition was less likely a product one and more likely a content one. Shutterstock, a stock photography and art company, is likely looking to cement its place as the owner of proprietary data that can be used to train AI.
That's a lot of money of a dataset, but the future of AI depends on training sets, and will be less about the models and more about the data use to train them, so in the long term this isn't a bad bet.
Also, expect an AI gif generator coming soon. It'll probably take the fun away from gifs, but let's see.
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