Meta, the parent company of Facebook and Instagram, has announced that it is selling its GIF company Giphy to Shutterstock for $53 million. This is a loss of $262 million for Meta, as it acquired Giphy for $315 million in 2020. Meta is Forcibly Selling Giphy for Only $53 Million.
Meta is selling Giphy because of increased regulatory pressure from the UK’s Competition and Markets Authority (CMA). The CMA is concerned that Meta’s ownership of software would give it an unfair advantage in the market for GIFs.
CMA’s
The CMA’s concerns are based on the fact that Meta is a major player in the social media market. Meta owns Facebook, Instagram, and WhatsApp, which are all popular platforms for sharing GIFs. If Meta also owned software, it would have a monopoly on the GIF market. This would give Meta the power to raise prices, stifle competition, and reduce innovation.
In addition to regulatory pressure, Meta is also selling software because of declining public interest in GIFs. The use of GIFs on social media has declined since Meta acquired Giphy in 2020. This is likely due to a number of factors, including the rise of other forms of visual content, such as memes and videos.
Despite the loss, Meta believes that software is in good hands with Shutterstock. Shutterstock is a leading provider of stock images and videos, and it has a strong track record of success. Shutterstock is also a major player in the advertising market, and it has the resources to help Giphy grow its business.
The sale of Giphy to Shutterstock is expected to close in June 2023.
Here are some additional details about the sale:
The deal was approved by the CMA in March 2023.
As part of the deal, Meta will enter into a commercial agreement with Shutterstock to continue accessing Giphy’s content across its product suite.
The sale is expected to close in June 2023.
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