Shutterstock announced on Tuesday its plans to acquire Giphy, a renowned platform for animated images, from Meta in a cash deal worth $53 million. This acquisition comes several months after Meta, the parent company of Facebook, agreed to divest Giphy due to concerns regarding competition.
In 2020, Meta acquired Giphy for a reported sum of around $400 million. However, the deal faced regulatory challenges when Britain's competition regulator, the Competition and Markets Authority, ordered Meta to sell Giphy. The concern was that Giphy's ownership by Meta could potentially hinder access to its content for competitors like Snapchat and Twitter.
The successful campaign by the Competition and Markets Authority marked the first instance of a regulator forcing a US tech giant to sell an already acquired company. Following this development, Shutterstock, a leading global provider of high-quality licensed images, videos, and music, seized the opportunity to acquire Giphy.
Shutterstock expects the deal to be finalised next month, and as a result, its shares experienced a premarket surge of up to 4 per cent. However, the company stated that Giphy's contribution to revenue would be minimal in the current year. They plan to implement strategies to boost revenue generation from Giphy starting in 2024.
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Shutterstock CEO Paul Hennessy expressed enthusiasm about the acquisition, stating that it marks an exciting milestone in Shutterstock's evolution as an end-to-end creative platform. Giphy, known for housing the world's largest collection of animated images, commonly referred to as GIFs, and web-based stickers, is widely used on various platforms including Facebook, Instagram, TikTok, and Microsoft Teams.
Giphy's vast content library features not only user-generated GIFs but also official submissions from renowned media companies like Disney and Netflix. With approximately 15 billion daily impressions, Giphy holds significant influence in the digital realm.
By acquiring Giphy, Shutterstock aims to tap into its massive user base of around 1.7 billion daily users.
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