Facebook acquires Giphy for undisclosed sum

[Matrix]

 

 

 

Bottom line: Facebook has made a number of shrewd acquisitions over the years including WhatsApp and Instagram. Will its latest purchase of Giphy also fall into that category or will it ultimately come up short?

Facebook on Friday announced that it has acquired Giphy and will be integrating it into the Instagram team. Financial terms of the agreement were not shared although according to Axios’ sources, the deal is valued at around $400 million.

 

Giphy was founded by Alex Chung and Jace Cooke in early 2013, first as a search engine for GIFs. The service proved immensely popular right out of the gate and shortly after, it was expanded to share GIFs on both Facebook and Twitter.

 

By 2017, Giphy had amassed over 200 million daily users.

 

In today’s announcement, Facebook said that 50 percent of Giphy’s traffic comes from the Facebook family of apps (and half of that comes directly from Instagram).

 

To date, the company has raised around $150 million in venture capital.

 

Sources familiar with the matter told Axios that the companies started talking before the pandemic although initially, it was more about a partnership than an acquisition.

 

Looking ahead, Giphy will continue to operate as users have come to expect. Users will still be able to upload GIFs, developers and API partners will still have the same level of access they enjoy today and the creative community will still be able to “create great content.”

 

Source

[Karlston]

Facebook’s Giphy acquisition sounds antitrust alarms in Congress

Republicans and Democrats are skeptical of the deal

Photo by Sarah Silbiger/Getty Images

A bipartisan group of senators are sounding the antitrust enforcement alarm Friday over Facebook’s newly announced acquisition of Giphy, a GIF-making and sharing website.

 

On Friday, Facebook announced that it would acquire Giphy for the reported price of $400 million. Giphy is one of the largest GIF sites on the internet and social media and messaging services like Twitter, Tinder, Slack and iMessage already have Giphy integrated into their apps.

 

In a Friday blog post, Facebook said that half of Giphy’s traffic comes from Facebook apps and that the gif website would be rolled into Instagram, a Facebook-owned product. In that same post, Facebook suggested that Giphy’s core function as a GIF-sharing app across social media would not change and that developers would “continue to have the same access” to its services.

 

Still, that pledge hasn’t quieted the growing chorus of congresspeople concerned over potential anti-competitive behavior from Facebook. In statements Friday, Republican Sen. Josh Hawley (R-MO) and Democrats Sens. Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN) were skeptical of the deal.

 

“Facebook keeps looking for even more ways to take our data,” Hawley said in a statement to The Verge. “Just like Google purchased DoubleClick because of its widespread presence on the internet and ability to collect data, Facebook wants Giphy so it can collect even more data on us. Facebook shouldn’t be acquiring any companies while it is under antitrust investigation for its past purchases.”

 

Over the last few weeks, Democrats like Warren, Klobuchar, Rep. Alexandria Ocasio-Cortez (D-NY) and Rep. David Cicilline (D-RI) have called for heightened scrutiny over large corporate mergers amid the novel coronavirus pandemic. Warren and Ocasio-Cortez announced plans to introduce the “Pandemic Anti-Monopoly Act” that would impose a moratorium on large mergers until the Federal Trade Commission “determines that small businesses, workers, and consumers” were “no longer under severe financial distress.”

 

In a statement Friday, a Warren spokesperson pushed for the passage of this bill in light of Facebook’s Giphy purchase. “Facebook’s acquisition is yet another example of a giant company using the pandemic to further consolidate power - this time it’s a company with a history of privacy violations gaining more control over online communications,” the Warren spokesperson said.

 

Earlier this week, Klobuchar signed onto a letter with Warren and Cicilline to the Federal Reserve and the Treasury Department requesting that they halt all mergers between large companies that received “bailout” funding from Congress’ coronavirus relief packages. Klobuchar said in statement Friday that the “Department of Justice or the Federal Trade Commission must investigate this proposed deal.”

 

Klobuchar continued, “Many companies, including some of Facebook’s rivals, rely on Giphy’s library of shareable content and other services, so I am very concerned about this proposed acquisition.”

 

Republicans have largely pushed back on the Democrats’ calls for a merger moratorium. In a letter earlier this week, Republicans asked the Justice Department and FTC to refuse any changes to antitrust enforcement during the pandemic. “Unfortunately, these ideas are part and parcel of the latent socialism embraced by many modern Democrats, which represents an existential threat to America’s economic superiority,” the Republicans wrote.

 

Makan Delrahim, the Justice Department’s top antitrust enforcer, told CNBC Wednesday that it would be “misguided to just block all attempts for transactions.”

 

 

Source: Facebook’s Giphy acquisition sounds antitrust alarms in Congress (The Verge)