Online stock-photo marketplace Shutterstock announced its plan to acquire GIPHY from Meta Platforms for $53 million in an all-cash deal.
This acquisition comes as a significant loss for Meta, which acquired GIPHY in 2020 for $315 million, highlighting a shift in strategic focus.
The deal is set to close in June 2023, and Shutterstock has stated that it will maintain its full-year revenue guidance.
Shutterstock's Expansion and Meta's Evolving Landscape
Shutterstock's decision to acquire GIPHY is backed by its confidence in the platform's long-term value. While the acquisition is projected to contribute minimal revenue in 2023, Shutterstock remains optimistic about its potential for monetization and growth.
As news of the acquisition broke, Shutterstock's shares experienced a boost of over 3% in pre-market trading on Tuesday, signaling investor confidence in the strategic move.
"This is an exciting next step in Shutterstock's journey as an end-to-end creative platform," remarked Shutterstock CEO Paul Hennessy.
"Shutterstock is in the business of helping people and brands tell their stories. Through the GIPHY acquisition, we are extending our audience touchpoints beyond primarily professional marketing and advertising use cases and expanding into casual conversations," he added.
GIPHY's Integration with Meta and Regulatory Challenges
GIPHY, known for its platform that allows users to search for and utilize animated images in messaging apps, was deeply integrated into Meta's ecosystem.
Even before Meta acquired the GIF platform, the social media company had expressed interest in the platform for years. However, shifting regulatory landscapes and evolving strategic priorities prompted Meta to divest.
In 2022, the Competition and Markets Authority ordered the tech giant to divest GIPHY, citing concerns over potential anti-competitive effects.
The investigation began in June 2020, reflecting regulatory scrutiny of technology acquisitions. This divestiture further underscores the increasing regulatory oversight in the U.K. and the U.S.
Meta, formerly known as Facebook, has faced intensifying regulatory scrutiny in recent years, both in the U.K. and the U.S. The U.K.'s CMA has been particularly vigilant in reviewing technology acquisitions, as seen in its decision to block Microsoft's proposed acquisition of Activision due to potential adverse effects on the cloud gaming industry.
Meanwhile, in the U.S., the Federal Trade Commission (FTC) has imposed restrictions on Meta's ability to monetize young users' data and alleged privacy violations.