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Facebook to acquire GIPHY for integration with Instagram

Facebook to acquire GIPHY for integration with Instagram Blog Feature

John Becker

Revenue & Features Editor, Co-host of Content Lab, 15+ Years of Writing and Teaching Experience

May 19th, 2020 min read

The meme world was set ablaze on Friday with news that social media giant Facebook is set to buy the internet’s largest maker and library of GIFs for a reported $400 million. 

Axios first broke news on the story, and Facebook confirmed the deal later in the day with a post entitled “Facebook Welcomes GIPHY as Part of the Instagram Team.”  

While many details have yet to be announced, this deal promises to have far-reaching ramifications for social media users everywhere. 

Here’s what we know about the deal so far — and some guesses about what might come next.

Details of the deal

According to Axios, “GIPHY is a massive video library, with hundreds of millions of daily users that share billions of GIFs, that generates revenue via branded content.” According to GIPHY itself, more than 700 million people see its content on any given day

GIFs, or animated loops of video like the one below, have long been a mainstay of internet culture, with much of their use coming from social media. 

via GIPHY

In fact, according to Facebook’s press release, “50% of GIPHY’s traffic comes from the Facebook family of apps, half of that from Instagram alone.”

It seems GIPHY will remain somewhat autonomous after the deal. Facebook states that New York-based GIPHY “will continue to operate its [own] library.” 

“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.”

As a result of the deal Facebook stock surged in trading on Friday and Monday, nearly erasing its COVID slump and coming within striking distance of its all-time high.

Clearly, this is big news.

What’s happening next

Facebook has been the subject of numerous federal antitrust investigations, and it’s likely that this deal will face scrutiny as well. 

Facebook has built its business in part on its acquisition of popular platforms, with Instagram and WhatsApp being the most well known.

There is currently much speculation as to how Facebook plans to make money on this deal — but very little clarity. Targeted ads? Branded marketing? Charging platforms for GIPHY integrations?

Why this matters

While much of GIPHY’s traffic comes from Facebook, much of it comes from elsewhere as well, and there is speculation as to the future of those integrations. 

After news of the deal broke, The Verge reached out to numerous apps and platforms that utilize GIPHY in one way or another, from Apple to TikTok to Twitter to Snapchat. 

For the most part, these companies have yet to comment (or declined to comment), while some have issued vague responses like this one from Slack VP Brian Elliott:

“Slack is committed to protecting user and company data. GIPHY doesn’t receive any information about users or even companies using the GIPHY for Slack integration, and only sees Slack usage of the GIPHY API in aggregate.”

Slack’s allusions to privacy echo broad concerns that many have about the deal.

Facebook has received much negative press in recent years for its handling of privacy. Even if GIPHY still operates as it did in the past, could Facebook track users? It seems unlikely, as it currently stands.

According to The Verge, “there are no tracking pixels, cookies, or any other embedded user tracking mechanisms in GIPHY's GIFs or stickers.”

The app Telegram reports that the GIPHY API only sees search terms, not any user data.

Still, the integration of the world’s largest social media empire with one of the internet’s most popular content generation tools could have implications for billions of users.  

This developing story will continue to unfold in the weeks ahead. We will report back as further details become available. 

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