Facebook VP of Product Vishal Shah has announced that Facebook has bought the super popular GIF (moving pictures) platform and library Giphy. Facebook has already integrated Giphy into their various platforms in the past, but now they plan on intertwining Giphy’s endless library with Instagram. Axios reported this morning that the deal between the two companies is evaluated at ~$400 million.
Facebook has “used GIPHY’s API for years, not just in Instagram, but in the Facebook app, Messenger and WhatsApp.” In their words, “we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves.” A lot of the emphasis of their post is focused on increasing creativity and peoples’ ways of communicating via GIFs. Facebook plans on increasing Giphy’s library and stated the platform will still be run the same way, but they hope to accelerate how people use the GIFs and the platform’s overall efficiency.
According to Facebook’s post, “People will still be able to upload GIFs; developers and API partners will continue to have the same access to GIPHY’s APIs; and GIPHY’s creative community will still be able to create great content.” So essentially Facebook will not cut off other large companies, competitors, or third parties who also rely on Giphy for content. CNBC pointed out huge companies like Slack and Twitter already have Giphy built into their platforms, and even Apple heavily relies on Giphy for GIFs sent through their iMessage app.
Facebook has been using Giphy forever in their various apps and has actually previously already attempted to buyout Giphy back in 2015 for $17 million. They were unsuccessful and Giphy used it to raise more money from other investors like big social media companies during Series B funding. Despite the prominence for wanting to expand creativity in their press release, Facebook is aiming to profit off Giphy’s data they’ve acquired. More data for Facebook through Giphy allows them to add more streams of revenue through data collection, targeted advertising, and further digital marketing tactics. Facebook’s treasury of data just got a lot bigger and that can be seen by some as a cause for concern.
Facebook is no stranger when it comes to data privacy issues and is constantly in the news for legal battles regarding consumers security. Just four weeks ago, Loginhood reported over 267 million records of Facebook users’ information were being sold for just a mere $600. Also given the current economic climate because of the pandemic a merger of this size is controversial. For a company as large and as powerful as Facebook it will be interesting to see the Federal Trade Commission’s (FTC) reaction to the merger.