Following UK antitrust order, Meta sells Giphy to Shutterstock for $53M

https://techcrunch.com/2023/05/23/meta-sells-giphy-to-shutterstock-for-53m-after-uk-divestment-order/

by mirthlessend • 3 years ago

268 170 3 years ago

techcrunch.com

not_your_vase2• 3 years ago

You have to spend money to make money.

BonoboIO• 3 years ago

Sounds like the SoftBank VC motto

insane_dreamer• 3 years ago

No, SoftBank's motto is you have to spend $10 to make $5.

prepend2• 3 years ago

I’m fascinated by the economics of image sharing sites. They fill a fundamental need to share images across other platforms but they seem expensive to run and difficult to monetize.

Have there been successful image hosters that weren’t just spending money to capture users in order to sell out or eventually enshitten (imgur, giphy, imageshack)?

Shutterstock is selling prints so it will be interesting to see what they do with giphy.

I remember when Imgur started and they were really nice and seemed to be a low cost (I think only one employee) so they could host barebones without making the experience bad for users (ads, data mining, etc).

KRAKRISMOTT• 3 years ago

Just remember the prices for AWS, CloudFlare, and GCP are for application software. Raw bandwidth are a lot cheaper when it comes to content focused CDNs and dedicated hosting.

pjc50• 3 years ago

Image hosting has to deal with the moderation problem, especially if it wants to monetize through advertising.

duxup• 3 years ago

It seems like and endless Whac-A-Mole of free unprofitable services.

Can this go in infinitely?

xyzzy4747• 3 years ago

There's always speculative value because some executive somewhere thinks they can turn it around and make it profitable. So it can keep being flipped across different owners. It can go infinitely because the cash comes from elsewhere.

somedude895• 3 years ago

Rising interest rates are putting a stop to this. Finally.

notatoad4• 3 years ago

it will continue for as long as VCs allow it to.

it's essentially just burning through VC money to provide free image hosting. every time the funders start trying to make their money back, somebody will start a new free image host funded by a new batch of suckers.

ghaff4• 3 years ago

Microstock was certainly a mini-rage for a while. All the photographers I knew who played with it got out pretty quickly. There was very little money in it (I played a very little and don't think I ever sold anything.) and a lot of classic stock photography of people requires model release forms.

throwitawaylord2• 3 years ago

Shutterstock does not sell prints.

prepend2• 3 years ago

Thanks, I confused it with Shutterfly.

iambateman• 3 years ago

I think the promise of giphy was that advertisers would pay for sponsored gifs. So The Voice gets top placement for “wild crowd” gif and then gets shared X,000,000 times in a native way.

It’s a sensible thesis that appears to be invalidated for now.

petercooper• 3 years ago

I agree. It's interesting because nearly all the GIF searches I use on a regular basis are terrible, yet I wouldn't be too perturbed if I were given relevant/funny/interesting GIFs that contained product placement (say, a GIF for "cheers!" might be someone raising a glass of Coke).

I think the problem might be that advertisers can't control context. Someone might say something vile (but legal) on Twitter and get lots of meme GIFs in the replies that advertisers would be very unhappy about, and it's a more direct connection than having your sponsored tweet appear in the chain.

stemlord2• 3 years ago

I think giphy more tried to play the analytics tracking angle. They made it prohibitively difficult to right click > copy .gif url from their site seemingly so they could control sharing through trackable means

aklsdjfhaiuehf• 3 years ago

appears to be invalidated for now.

why do you say so?

Advertising within the seller doesn't help "the ecosystem". (auditing, Ad networks, clearing house, more auditing, nsa-ish, etc)

If facebook kept it and integrated on whatsapp (their only upward active user product) then they would sell ads there and that's it.

With them forced to sell to a 3rd party, now that 3rd party will have to offer reverse auctions like every other publisher. Everyone will get their sweet stream of user profiles and "the ecosystem" will be happy. It is very much not invalidated now.

tourmalinetaco• 3 years ago

That reminds me of how unnaturally “Baby Yoda” spread. They show it one time and suddenly it was all over Reddit (which didn’t shock me, they’re the textbook example of consumer), Giphy, Imgur, etc. Including scenes that hadn’t been revealed yet.

I can only imagine that Disney put some big bucks into advertising to help pivot the SW IP away from the sequel trilogy before additionally pushing hard on their streaming service.

I also imagine Disney made far, far, far more money from any deals with Giphy than Giphy got from Disney. Hence why they’re being thrown around like a stuffed toy.

rickdeckard2• 3 years ago

Shutterstock is selling images with license (!), that's certainly a more stable business model than "crowd-sourced image-hosting".

Giphy seems to become a advertising platform itself, with advertisers using it as part of viral campaigns (i.e. have related gifs available when launching a movie), although I doubt that created alot of revenue so far.

That said, it's striking how well-embedded giphy is across a huge amount of messaging platforms, which is likely their biggest asset today...

littlestymaar2• 3 years ago

Shutterstock is selling images with license (!), that's certainly a more stable business model than "crowd-sourced image-hosting".

It definitely used to be one at least, but with the rise of automatic generation I wonder how well will Shutterstock be in the next 5 years.

dugmartin• 3 years ago

I'm sure its been done (I'm guessing many times) but my thought would be to have a free service that auto watermarks all images with the image hosts domain name and upsell a paid account that doesn't watermark images. If you get 0.01% paid and keep costs low by shopping around for CDNs I think it could be a good "lifestyle" business as long as you had some kind of auto moderation system.

toomuchtodo• 3 years ago

WhatsApp used to charge $1/year before the Meta acquisition. If you could convince people to pay $3/GB, that'd be enough to front the content with Cloudflare and store the data in the Internet Archive forever. Still need to solve the moderation problem, but it isn't impossible.

Rockjodd• 3 years ago

Not a general pure image sharing site, but one dedicate for wallpapers (and more) for your personal device (ie your phone), but Zedge did/still provides sharing UGC (user generated content) and as well a premium service for artists.

They are in the margins of positive income at least last I checked.

amne• 3 years ago

And this is exactly where IPFS makes sense for me. As long as the community wants something to exist it can exist for free. If only you want it to exist, host it. When you no longer care, it will exist until no one hosts it anymore.

nebalee• 3 years ago

Platforms are somewhat shielded from liability for user provided content. How does that work for IPFS?

stemlord2• 3 years ago

If this were the only option, I bet most people would realize how much of the web really doesn't benefit them in any meaningful way, but merely gets used because it's there, and can be removed from their lives with minimal grief

qingcharles• 3 years ago

Shutterstock sells stock photos. They have an excellent inventory and good prices and I've bought plenty from them in the past for web projects.

But.. their business just went down the plughole with the advent of text-to-image AI. Now you can get pretty much exactly the image you needed without having to spend hours trawling through pre-made photographs.

Anunayj• 3 years ago

And it's extremely funny since most of these text to image models were container Shutterstock watermarked images, to the point it thinks humans see the world with a big shutterstock watermark across it with certain prompts.

hackernewds5• 3 years ago

what then happened to imgur? they suddenly decided to ban NSFW imagery and move on to becoming a reddit themselves

spaceman_20202• 3 years ago

Side note, but how defensible is Shutterstock's business after the generative AI boom?

I understand that Shutterstock's customers need royalty-free, high-res images with clear copyrights. Is the lack of clear copyrights the biggest hurdle to generative AI art adoption, or is the quality of the art itself the bigger hurdle?

automatic6131• 3 years ago

The people writing articles that are... appropriate for AI generated mush didn't buy stock images, and organisations like e.g. the BBC are not going to put uncanny valley images of hospitalness on the banner of their articles.

artursapek2• 3 years ago

You’ll be surprised how soon AI generated images are indescernible from high quality stock photos

patall• 3 years ago

Heise, one of the most reputable and in-depth tech publishers in Germany is using them. Mostly for articles where an image doesn't add much (like generic battery image in a text about new battery tech), but still. Possibly because images increase engagement

detritus2• 3 years ago

Funny, because I live in the world of designers and a lot of them see a very near future where generated images replace 'real' photographed stock, if some are not there already.

dorkwood2• 3 years ago

Stock images were also popular in advertising, since they were considered cheaper than hiring an illustrator or photographer. AI-generated images are cheaper again, and most people can’t tell the difference.

ghaff4• 3 years ago

I think there are a couple answers:

- Quality is still pretty big. And if I have to spend hours prompt engineering, is it really a win?

- That said, there is some copyright murkiness and I probably wouldn't use generative AI in a marketing campaign as a large company. A lot of more incidental use like conference presentations, I wouldn't worry too much.

echelon• 3 years ago

Coca Cola already used Stable Diffusion in a big ad. (Most of it is still digital artists, but it's getting into the workflow.)

https://analyticsdrift.com/coca-colas-generative-ai-advertis...

Coca Cola is also getting in on UGC GenAI and trying to engage customers in participating.

GenAI in ads is going to be huge.

throwitawaylord2• 3 years ago

Former Shutterstock employee (was laid off in 12/2022).

Shutterstock makes most of it’s money from two operations:

1. Editorial content - images/video of news related events. Pictures of celebrities or photos of Biden, pictures of the Met Gala, etc. They have exclusive deals that keep this pipeline alive.

2. Commercial licensing - HBO/Netflix will often bulk buy a set of a couple hundred images for promoting their new show.

Everything else is trash web development and tech. They fired their AI team and their current AI tech is just rewrapped existing engines such as DALL-E. In the last five years they’re internal teams redesigned their website/marketplace at least 3 times. From React to React to NextJS. They frequently purchase companies and lay off the teams after about a year (see ya Giphy).

Shutterstock doesn’t have to be good at tech because they can feed off of the work of other companies doing it for them. That’s why they let companies like Facebook blatantly train off their data set. That’s why they consumed PicMonkey.

To make it seem like they are an innovator they rely on yearly announcements of investment in new fads (like their current AI efforts) and lay off tons of teams to boost their stock price so they can say they save on labor costs.

They are ripe to be displaced either by a smarter competitor that can offer better compensation per image or by Getty Images.

a13o• 3 years ago

I think they're well positioned. The winners of the generative AI space will be players with lots of copyrighted content. Shutterstock was already top of mind, and purchasing rights to all the images in Giphy strengthens their claim.

There's two paths. Either copyright claims lock down training, and Shutterstock now licenses their training dataset to companies; or generative art trained on open images lose their novelty (think Comic Sans but for photos) and Shutterstock gains an upper hand by having an existing pipeline of novel images to train with.

Stevvo• 3 years ago

You can probably answer your question by using shutterstock.com; generative AI is one click away from the stock image library.

jt2190• 3 years ago

The announcement comes… after the U.K.’s [Competition and Markets Authority] issued a final order for Meta to sell Giphy, on the grounds that the merger reduced dynamic competition.
… Shutterstock said it expects the deal to close next month, with Meta also signing a commercial agreement to continue accessing Giphy’s content across its product suite.

So, Meta still sees value in a Giphy they don’t own.

jagged-chisel• 3 years ago

Well, sure. They didn’t want to sell. This arrangement lets them “sell” Giphy and still get the benefits of access to its content. Kinda feels like an attempt to end-run around the order.

ffpip• 3 years ago

Meta already had access to it's content, the same way other social media platforms access Giphy's GIF library.

kastden• 3 years ago

How does Giphy make money? Does companies like Slack etc. pay for the integration?

detaro4• 3 years ago

It doesn't.

The idea (pre-aquisition, afaik Meta deprioritized that) was letting companies pay to push their gifs. Since companies can't directly buy ads in your private conversations, giphy could offer them the exciting opportunity to push people to send ads in meme-format to their friends! (I wish I was joking, but that was their framing)

dorkwood2• 3 years ago

Since companies can't directly buy ads in your private conversations

Dumb question, but why can’t they?

notjustanymike• 3 years ago

Turns out gifs and analytics tracking pixels have a LOT in common.

generj• 3 years ago

Analytics tracking pixels normally ARE GIFs, specifically a 43 byte transparent 1x1 GIF.

But most “GIFs” are not GIFs but rather Mp4, mov, or webm or some other compressed file format. Actual GIFs are extremely wasteful of bandwidth and not hardware optimized. The name lives on though.

giarc3• 3 years ago

If you've used Giphy, you may notice a ton of the gifs are from the CBC show "Schitts Creek". It seems like their media team did an incredible job clipping up the show and uploading a ton of high quality gifs to the platform. I'm reminded of the show almost everyday when searching for gifs. It's likely a (relatively) low effort, high reward piece of marketing.

furyofantares• 3 years ago

Enschittification

fknorangesite• 3 years ago

I will not stand for this besmirching of Schitt's Creek.

andybak2• 3 years ago

That's odd. I rarely see Schitt's Creek gifs. Maybe you just search for David-ish things a lot? :)

giarc3• 3 years ago

I'd say 80% of my gifs are either from The Office US or Anchorman, so you could be right!

refulgentis2• 3 years ago

Giphy's huge, way too huge for one effort to make impact, and I rarely see Schitt's Creek's photos. Confirmation bias? :)

rchaud• 3 years ago

Not the OP, but I see a ton of Schitt's Creek "reaction gifs" on Twitter replies, which are usually embeds from Giphy. The most common ones are SC, reality TV, maybe the Office US.

input_sh• 3 years ago

Just search for an emotion: confused, amazed, enraged, bitter, insulted, offended.

For all I've listed, Shitt's Creek watermark is visible near the top. That said, it's not the worst one. While I experimented with such prompts, I've seen a lot more (HBO) Max watermarks, but they don't do show-specific watermarks.

dghlsakjg2• 3 years ago

I think that it’s also to do with how visually exaggerated the four main characters on the show are. That style of acting leads to some great gifs that don’t need context.

jzb• 3 years ago

There's a few shows I've checked out solely because I've seen so many reaction GIFs and stills from them. ("Community" comes to mind.) If your show lends itself to the format, it does seem like a great way to market it.

7speter• 3 years ago

I’m trying to remember if it was giphy that if you search for Star Trek, 90% of the results are Star Trek Discovery gifs.

I guess deals with a given id holder was one way to monetize this sort of service, and totally stifle the organic weirdness and randomness at the same time.

whamlastxmas• 3 years ago

According to other posts CBC may be paying for that top placement

rsynnott2• 3 years ago

I think some of that may just be how _well-suited_ Moira and David in particular are to that sort of use. You also see a lot of reaction gifs using Lucille from Arrested Development, who's very much the same archetype as Moira.

giarc3• 3 years ago

Yes, but the format is very professional. It always includes the text, with some words emphasized in yellow. These are done intentionally, not just someone clipping a youtube video.

tootie• 3 years ago

Idk how they're business works, but I think more than few content properties curated gifs and possibly paid for search position.

moneywoes• 3 years ago

Was giphy uk based?

WJW• 3 years ago

No, they're from NYC.

omneity• 3 years ago

Can this be seen as some sort of laundering or collusion?

Surely somebody is making loads of money from an almost 10x change in price.

pavlov2• 3 years ago

The sale was forced by the UK antitrust agency while Giphy is a US company.

I guess it's theoretically possible that Americans colluded with the British civil servants to scam Meta out of $350 million, but it seems unlikely.

tasuki• 3 years ago

The sale was forced by the UK antitrust agency while Giphy is a US company.

That sounds... strange. Would China or Russia also have an ability to force US companies to sell parts? Has Facebook complied because they wanted to maintain good relations with UK regulators?

dghlsakjg2• 3 years ago

It was a court ordered sale, so it would seem that shutter stock is getting a deal that meta otherwise wouldn’t have put on the table.

camillomiller• 3 years ago

Such a great week for Zuck!

deet• 3 years ago

This is the second divestiture of an acquisition in two weeks by Meta.

Last week they spun out Kustomer https://www.kustomer.com/blog/new-chapter-standalone-company...

zeroonetwothree4• 3 years ago

For different reasons though.

PragmaticPulp• 3 years ago

This was forced by a regulatory body. Strangely, it was forced after the transaction had closed rather than blocked before closing.

desas• 3 years ago

That's because Facebook didn't wait for the UK regulatory body to come to a decision before completing the acquisition.

You don't have to tell the UK Competition & Markets Authority about an acquisition before it happens, but if you don't then you risk something like this happening. While an investigation is ongoing it may block some steps towards integrating companies and it gets about six months to make a decision. Facebook then spent a few years appealing and negotiating. Presumably giphy spent all of this time in some sort of limbo.

bombcar• 3 years ago

This is a loss of somewhere between 1,000 and 2,000 employee-years.

Eumenes• 3 years ago

$53m seems overpriced

peanuty13• 3 years ago

Metaverse acquired Giphy for $400M.

berkle44552• 3 years ago

detaro4• 3 years ago

The UK is deciding what companies operating in the UK can and can't do.

yalogin• 3 years ago

Yep makes total sense. I was shocked by how much they paid for it initially and could never justify that cost. 54 million seems more apt, but about 30 will be ok too.

berkle44552• 3 years ago

How is the UK dictating what US-based companies (Meta, Microsoft) can and can’t do?

surgical_fire2• 3 years ago

Well, if those companies prefer to not comply, they can always cease to do business in the UK. Nobody is forcing them.

What they can't do is operate in the UK, and at the same time avoid UK regulations.

zeroonetwothree4• 3 years ago

Obviously companies must follow local regulations but I think it is a bit different when they regulate that one US company can’t buy another US company. This has no direct effect on UK citizens. Of course legally the UK can do whatever they want, but philosophically regulating this type of behavior feels a bit more unusual and excessively overreaching.

rsynnott2• 3 years ago

In general, if you're a multinational, doing a merger, you'll want approval from authorities in the US, EU, probably UK (who tend to behave quite similarly to the EU ones), maybe China if you do business there. Where you're _based_ is almost irrelevant; if you want to do business globally, that means making yourself subject to a certain amount of local regulation.

If this were not the case, it would be impossible to regulate multinationals _at all_; a multinational thwarted by its home country would simply relocate (this happens anyway at the edges; note that most of the giant gambling countries are domiciled in weird island nations, say).

mwlp• 3 years ago

I find tenor's selection of gifs to be much better. I suspect Discord users are creating much of their content.

zip1234• 3 years ago

Tenor is owned by Google, which is all the more confusing for why the Giphy sale was blocked by UK regulators.

zeroonetwothree4• 3 years ago

Google greased the right palms and Meta didn’t perhaps

airstrike6• 3 years ago

I think the CMA has much more leverage / has been given much more power in recent years

rhaway84773• 3 years ago

Meta got what they wanted. Dara on Giphy’s users.

ec1096852• 3 years ago

This still seems like such a random acquisition for the uk to have blocked. Giphy has plenty of competition and gifs seem to he waining in popularity anyway.

airstrike6• 3 years ago

It certainly padded some aspiring politician's resume, though

calpaterson2• 3 years ago

It was blocked by a quango, not by a politician.

https://en.wikipedia.org/wiki/Competition_and_Markets_Author...

xwowsersx• 3 years ago

gifs are waning in popularity? Giphy serves up 10B gifs a day and Instagram now allows you to post a gif as a comment. Why do you say they're waning?

giobox2• 3 years ago

If giphy was doing so amazing, how does that explain the enormous write down today? Sure you can argue Meta overpaid, and there are some bounds applied by the regulator on how they could sell it, but I don't think that accounts for the entire gap.

ec1096852• 3 years ago

Apparently they are cringe: https://junkee.com/giphy-gen-z/341589

It also seems like most of the ones I see are screen caps of older tv shows.

yamtaddle3• 3 years ago

Giphy has plenty of competition and gifs seem to he waining in popularity anyway.

Am I in a bubble? I post and receive like 20+ gifs per day with my IRL friends and family. The rate has shown no signs of declining.

[EDIT] And what's replacing them?

onychomys• 3 years ago

You're not in a bubble, you're just old. The youths think gifs are corny and uncool.

airstrike6• 3 years ago

The CMA's order for Meta to sell Giphy after the transaction had already closed will go down in history as one of the biggest, most mind-boggling examples of regulatory overreach

Their whole argument was based on the fact that Giphy was CONTEMPLATING expanding their advertising business to the UK so the acquisition could hurt potential, future competition. Give me a break

https://www.klgates.com/CMA-Blocks-Meta/Giphy-It-Might-Be-th...

super256• 3 years ago

Im curious why they aren’t touching Tenor and Google. Isn’t that constellation basically the same?

jeroenhd2• 3 years ago

I wonder about that too.

My guess is that when the Tenor sale happened back in 2018 there were still enough of small companies that competed, Giphy being one of the last major ones to get taken over.

I don't know if antitrust watchdogs can still start a successful case five years later, but I would be very happy if they could undo that sale too. These tech companies are big enough already, they don't need more power.

mjburgess• 3 years ago

Presumably it's more to do with 50% of the ad market being meta, and 50% being google. Basically, the ad monopolies should be broken up -- so any acquisition whatsoever over any ad-supported platform is anti-trust.

kennywinker2• 3 years ago

Overreach is when antitrust laws are used to break up trusts?

airstrike6• 3 years ago

When they are breaking up potential future "trusts" for a business that doesn't exist, sure

jeroenhd2• 3 years ago

As far as I can tell, the watchdog and CMA started doing their job immediately when the news of the acquisition broke. Then three years of back and forth and legal appeals followed, and now Facebook has finally lost, as was expected three years ago.

The original order for the sale came in 2021, after an extended investigation from that same year, following an initial investigation started June 2020, about a month after the sale became public knowledge.

Giphy and Facebook didn't give the CMA an opportunity to block the sale before it happened, so of course antitrust action had to occur after the fact. That's not regulatory overreach, that's lack of a time machine.

karaterobot• 3 years ago

Is there a handy list of companies owned by Meta? I had no idea Giphy was one of their properties.

elintknower• 3 years ago

wow, sounds like they sold off Giphy for pennies on the dollar, potentially at a loss?

WXLCKNO• 3 years ago

The title in the article quite literally says they bought it for 400m and sold it now for 53m after a few years.

The potential of a loss is pretty good I think.

randomcarbloke• 3 years ago

that seems counterproductive.

smashah2• 3 years ago

Great, now they should be forced to sell Whatsapp.

peanuty13• 3 years ago

Why? Does WhatsApp even turn a profit for Metaverse?

smashah2• 3 years ago

Whatsapp is more used than SMS and all other apps combined. Is SMS controlled by one company? Whatsapp made Meta almost a billion dollars last year. Yet they're out here sending legal threats to OSS devs and devs of 3rd party clients. Are there 3rd party clients for SMS? Yes. Then why shouldn't there be 3rd party clients for Whatsapp? Zucks failed experiments on metaverse is resulting in him trying to aggressively monetise the golden goose.

mktk1001• 3 years ago

Typical EU with its regulatory overreach. They haven’t innovated in years and now milking American companies anyway they can.

pph• 3 years ago

The UK left EU a while ago.

ramesh31• 3 years ago

$53M sounds like a rounding error for accountants at Meta. Why was this such a big deal?

teacpde• 3 years ago

acquired for $400 million three years ago

SimianLogic2• 3 years ago

Is FB’s UK business worth $347M? I would call their bluff out of spite and just cut off service with a nice page that has the phone number and email of the bureaucrat that made the decision.

refulgentis2• 3 years ago

Yes, UK is 5th/6th biggest economy in the world, depending on who you ask. Honestly surprising to me as well, it's felt very small and inwardly focused last decade or so. There's some definite irony in me saying that as an American.

peanuty13• 3 years ago

Wow, I guess Brexit doomsayers may have greatly exaggerated the impending demise of the UK that they predicted.

advisedwang• 3 years ago

Their '23 Q1 10-K shows Europe revenue of $6.8B (for the quarter). By population the UK is 67M / 746M = 9% of the region. So that suggests the UK is responsible for $6.8B40.09=$2.4B of revenue per year, likely more as Facebook has high penetration there and it's a high value advertising market.

SimianLogic2• 3 years ago

Wow, much bigger than I would've thought!

I wonder if they could've just cut off Giphy in the UK (likely much smaller), which would theoretically keep the UK wide open for gif-sharing competition.

Technetium• 3 years ago

Nvidia AI will be able to train on all of Giphy too. Down the rabbit hole we go…

wly_cdgr• 3 years ago

- $60M - lol, $50M - ugh, $55M - $53M, final offer - deal

DoItToMe81• 3 years ago

To fucking Shutterstock? God damn, this is almost worse than just letting them buy it.

Following UK antitrust order, Meta sells Giphy to Shutterstock for $53M

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