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GIF Site Giphy Is Valued at $600M
- kelvin0 10y agoFrom the article: “We believe GIFs are emerging as a format that consumers love and will be really important to advertisers as well,” said Barry Schuler, a partner at Draper Fisher Jurvetson. OK, for me GIFs are from a bygone era of the web, for example: http://www.11points.com/Web-Tech/11_Best_Old_School_Animated_GIFs http://www.11points.com/Web-Tech/11_Best_Old_School_Animated... This is similar to bell bottom jeans coming into fashion again, and then having a retail store advertise them as an 'Emerging fashion trend' (more like recycling fashion trend)
- angus-prune 10y agoI entirely get what you're saying, but GIF doesn't mean GIF anymore. Many sites and applications are silently presenting MP4 or webm instead of actual gifs, often with the file format gifv. "gif" has stopped meaning a .gif and now just means a short, looping, animated video. File it alongside "disk" (solid state disk, save to disk etc), film (to mean movie) and various other weird language evolutions. These things used to grate on me, but then I chose to embrace the cultural history embedded in our language. I look forward to the year 2060 Buzfeed - "Top 37 words that used to mean something else", "You'll never guess why we call videos 'gifs'" etc etc ;)
- dredmorbius 10y agoDIVX.
- cyborgx7 10y agogifv isn't a file format, just an extension for an html document
- angus-prune 10y agoI meant file extension. My bad.
- ionwake 10y agoI am confused as to how they could afford the bandwidth, atleast at the start, to host the animated gifs
- rileymat2 10y agoI am not sure it would cost all that much with a CDN like cloudflare.
- Artemis2 10y agoCloudflare will not be happy if use them for image hosting: https://news.ycombinator.com/item?id=12825719 https://news.ycombinator.com/item?id=12825719
- detaro 10y agoIf you overdo it, but for starting out it works. Giphy was founded in 2013 and raised several million in early 2014, at which point they probably could afford paying a CDN or for their own infrastructure.
- vidarh 10y agoCloudflare doesn't cache all that much. If your goal is to minimize bandwidth costs, you can throw together your own agressively caching CDNs on bargain basement hosts, though, and use a more expensive CDN or something like S3 as fallback (DNS with short TTL; it has all kinds of problems, but it's better than bankrupting yourself on high bandwidth until you have sufficient traffic to justify more elaborate cost reduction schemes). Once you reach sufficient scale: multihomed dedicated servers + peering wherever you have enough traffic. Or negotiated with various CDN providers while letting them know you've done the maths on your own dedicated setup.
- grosbisou 10y agoI wonder if I am once again too negative. But what the hell? Valuation doesn't mean anything I know. But how can they raise so much money on a product like this? What's the monetization available behind this apart from selling user data.
- ErikVandeWater 10y agoI think you're right. Selling user data itself is not nearly as valuable for Giphy as for other sites. No one stays on Giphy for long, or shares anything interesting about themselves apart from what Giphy can get from cookies. They say 100 million people see Giphy gifs a day, so probably about 10 million actually "use" Giphy. Even with FB's $13.74 valuation per user with better analytics and a validated business model, that only comes to $137M. On a completely unrelated note: "Giphy, which is pronounced with a hard 'g'..." Thank god they know how to pronounce it unlike these (what I suppose could be called) "people" who pronounce it with a soft g. ;)
- bluthru 10y ago20 times more valuable than The Wirecutter?
- ksherlock 10y agoYou know that Schrödinger guy? The one with the cat box? Well, he had a second box. What's in it? Nobody knows! But as long as you don't open it, it could be anything (dutch tulip bulbs, $1 billion flooz, rare beanie babies... the mind simply reels!) Wirecutter opened up their box and there was revenue and a business plan inside. That's nice I guess but now their box is worthless.
- qwrusz 10y agoGreat comment! This is one of the best descriptions I have read on VC investing and startup valuations. If true, doesn't it imply VCs hand over millions without knowing details of a company and founders can benefit from delaying going public..Oh, well whaddya know
- blunte 10y agoI think that's the problem - so many startup investors are people who accidentally got rich off some impossible or meaningless event that they think magic|luck|mystery is what makes more money. At least with Beanie Babies, you knew exactly what you were getting. A Beanie Baby couldn't pivot.
- aakilfernandes 10y agoRelated: The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies https://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-insane-math-that-s-creating-so-many-billion-dollar-tech-companies https://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy...
- overcast 10y agoInsane is accurate.
- tyre 10y agoBut Giphy faces challenges in building a business. It hasn’t figured out a way to bring in revenue, and it doesn’t own many of the GIFs or have exclusive distribution partnerships. They have raised $150 million for a GIF search engine.
- deleted 10y ago[deleted]
- riffraff 10y ago..Which also works crappily. I am exposed to giphy through the slackbot interface and it never finds anything relevant.
- yolesaber 10y agoI really hate it when there's that one coworker that insists on /giphy-ing everything in slack. Usually its a clueless manager who thinks cute little pictures will inspire team morale, but all the results are always random and oftentimes tone-deaf or, in some cases, straight up NSFW. It's very annoying, thank god I can turn off gif display automatically.
- kinkrtyavimoodh 10y agoWhy can't it just be "someone who finds it cute / fun". Why does it always have to be some cynical "MBA who thinks it will inspire team morale"
- yolesaber 10y agoBecause in my anecdotal experience it's always been the overeager manager. I also qualified that statement with "usually", ergo it's not the absolute "always" condition you specify in your unnecessary reply. Either way I find it mad annoying. Emoji reactions are perfectly fine and non-intrusive ways of non-verbally communicating in a slack or IRC environment. GIFs suck. They are possibly one of the worst image formats out there.
- kylelibra 10y ago1B gifs served per day and 100 DAU. Anyone have a guess at a business model to monetize on that sort of traffic?
- georgespencer 10y agoFreemium.
- strictnein 10y agoAcquisitionium Sounds like something Yahoo would have bought circa 2013.
- sonthonax 10y agoRead the article, advertising: > Search engines like Alphabet’s Google generate the vast majority of their revenue from advertising. “Almost all the content flowing through Giphy, there’s some branded element to it already,” Mr. Leibsohn said.
- pbhjpbhj 10y agoI wonder if putting a final frame advert on the gif would work well. Not to intrusive, matches a common technique for videos so familiar to users. 1k impressions for a dollar with 10% of gifs completing on 1B gifs per day would give $100k. Are those figures wildly out? Not really a business, just advertising.
- msfeldstein 10y ago1 idea, Advertisers can pay to have their branded content be one of the first suggestions in a GIF search
- fnbr 10y agoThat's insane. Gfycat [1] is based in my hometown (Edmonton, Alberta), and I always thought it was a dumb idea with no potential for monetization. Looks like I'm wrong. [1]: https://gfycat.com/ https://gfycat.com/
- cloudjacker 10y ago> potential for monetization the irony here is thats all they have but thats enough to pivot to the business of equity sales
- overcast 10y agoWorth $600,000,000 - "hasn't figured out a way to bring in revenue". Got it.
- nathancahill 10y agoWhat a time to be alive.
- JoelBennett 10y agoI'm always baffled by this as well. "Let's make something cool, get money from investors, then figure out how to make money off it!" In other words, cash in and leave before people find out there actually isn't money in it or cram the service full of advertising and watch the users flock to the next upcoming thing as your service tanks like a flaming dumpster rolling down a San Francisco hill.
- sumedh 10y agoWasn't that Google's business model, they got funding before they figured out how to make money.
- msane 10y agoSounds like "acquihire in 2 years for $25M"
- adventurer 10y agoOr maybe an IPO in 5 years for $4 billion.
- bigdubs 10y agoI wanted to see how hard it would be to build a gif search engine, I made https://gifffy.com https://gifffy.com in a month. My buddies and I used it for our personal slack instead of giphy. It is nice to be able to adjust the search results ourselves. I am pessimistic on gif search as a business. I am one (not super) talented developer and I made a replacement in a month.
- exogeny 10y agoGiphy sucks as a business. How anyone could invest in it beyond a seed valuation is absolutely beyond me.
- yolesaber 10y agoDo you have a blogpost or other info about how you made it? Did you just scrape tumblr, twitter etc and associate the metadata tags with the images? Or did you do any machine learning classification? Either way, you should apply for seed funding. There's clearly a market for gif searching...apparently.
- bigdubs 10y agoI am an avid reader of `/r/reactiongifs` and `/r/highqualitygifs`. Classification is done by hand, and the idea anyway is to use feedback (either slack reactions or voting on the site) to figure out what the best tag for an image is. ML classification is pretty tough when it comes to dank may-mays.
- yolesaber 10y agoClassification is done by hand? So you find a gif you like and then add it to your db and do all the tagging and metadata yourself? Interesting. I feel like a script that scrapes Tumblr for gif posts and their associated tags would be a good approach to start automating things.
- bigdubs 10y agoI've found that quality >> quantity, and specifically tumblr is a horrible place to find gifs (bad quality, weird contexts or usage for the gifs).
- neom 10y ago$600M isn't a crazy price tag for a media property that wanted all the content and the brand. Plus, giphy has built some pretty deep integrations, I don't expect apple or slack etc will all of a sudden start a giphy competitor. If companies like Snapchat who already use sponsored content from brands are told by those brands to pull that content from the giphy api because they are using the base content on other platforms for the same campaign, seems like it could become a viable business (I retract "become a viable business" and replace it with "have an outcome")
- GrinningFool 10y agoBut what's the value of their integrations? Sure they exist, but at best they provide a convenient means of inserting entertainment into typically business related chat - with no further stats gathered on who views via integration, etc.
- neom 10y agoThe value of the integration is the promise of becoming a distribution platform. From there you can figure out services and tools that folks will pay for because it's easier/best to distribute your animated content through the giphy platform to the partners, and, you have the ability provide insights and analysis on what channels are working well, etc (snapchat like this type of content, slack likes this, iMessage likes this/////) - I'm not saying that's easy, or even possible. Simply if I was the CEO of giphy, that's what I'd try to do with the funds. If I did a good job, I presume given a year or two of building out and getting more deeply integrated, I could sell the technology, team and partnerships to a bigger company for $500-$600MM.
- exogeny 10y agoThat is a LOT of things that have to go right just to sell at the same valuation they just raised money at. That's exactly why this is so insane.
- GrinningFool 10y agoFair point. That sounds like a viable path to acquisition - though I suspect the odds are stacked against it as a path to profitability.
- arkitaip 10y agoI LOVE Giphy! It's the only reaction/gif site that made me think, "They should really have their own chat app". I would download that app in an instant.
- hbosch 10y agoThey have a keyboard app which is probably the better call.
- trymas 10y agoProbably I would look like a noob in the context of SV startup world, but can someone tell me how these insane evaluations are calculated? Or there is a deal on the way with google/facebook/whatever for their user/gif database and/or search engine? Maybe they have some insane R&D going on that I am not aware of? When I see startups without any proper business model on how to make money evaluated for insane prices ..ahem twtr ahem.. and burning mountain loads of money - it makes my blood boil.
- fullshark 10y agoProbably the user base and perhaps some patents they have.
- econner 10y agoUser growth, number of page views, engagement / retention + trajectory, evaluated against similar businesses. People said the same thing of snapchat, facebook, and twitter early on.
- trymas 10y agoafaik, only facebook is making money, twitter is still an "eternal startup" with still insane market cap (even though that they are public). Snapchat may have some cool AR stuff in their R&D department, but they still "have not found themselves".
- overcast 10y agoOnly one of those is making any money.
- summarite 10y agoSnapchat with higher valuation than Deutsche Bank. Tells you a lot about two different industries at once - but if i had to invest in one i know I'd always choose the latter over the former.
- nerfhammer 10y ago
- slezakattack 10y agoI think what makes Giphy so popular is its integrations with Slack and Facebook. However, the Giphy Slack integration is really awful. Should be renamed to gif roulette or something. RightGIF Slack integration is a lot more accurate. I'm not sure what they are doing differently but the $600MM valuation for a below average search engine is understandably off-putting..
- zodPod 10y agoWhat? Why?! I only ever see the giphy URL I didn't even realize there was a website to it I just thought it was a host like aws or something. Who are the idiots who do these valuations?
- zelias 10y agoWould just like to point out that the article takes a hard stance on one of the most hotly debated internet topics out there: Giphy, which is pronounced with a hard “g”...
- tdb7893 10y agoAt least in my social circles the hard g has won. Unless they rename it Giraffe Interchange Format I'm sticking with the hard g.
- generj 10y agoI'm the guy who has continued fighting the good fight even though the rest of my social circle have decided on a hard g.
- evanelias 10y agoAfter re-reading that sentence twice, I think they were referring to how Giphy (the company) pronounces its name, as opposed to taking a hard stance on how to pronounce GIF. Poorly worded, on first read I was quite surprised too!
- yummybear 10y agoI can't imagine what it would be like trying to explain this stuff to someone from the '40s.
- ploika 10y agoFrivolity is nothing new. They'd get it as much as we do.
- angry-hacker 10y agoBesides the value, how these companies avoid copyright problems? It's literally pirate bay but they host themselves.
- jgalt212 10y ago> raised a fresh $72 million round of equity funding from lead investor Draper Fisher Jurvetson, as well as Institutional Venture Partners and China Media Capital These people all need to have their heads examined.
- merrickread 10y agoThe bane of all work slack channels
- zump 10y agoWho owns the intellectual property though?
- TeMPOraL 10y agoAnother iteration of the endless cycle of image hosting sites? The cycle goes like this: - people want a bullshit-free service to upload images to, so that they can link to them, and there's no option available - somebody starts such a simple, bullshit-free service - as time goes by, the service realizes hosting costs money and they can't operate on a loss forever - they start adding bullshit to try and bring in some revenue - site turns into the same bloated crap it replaced - somebody starts a new bullshit-free site, and users migrate For instance, imgur is at the last stage of this cycle now. If giphy is taking serious investor money, it spells an accelerated period of crappifying the service - investors need to get their return somehow.
- randomdrake 10y agoI remember seeing the original post[1] when it was created. Exactly as you say, there wasn't a good service to just host images. "I got fed up with all the other image hosts out there so I made my own. It doesn't force you to compress your images, and it has neat things like crop, resize, rotate, and compression from 10-100. It's my gift to you. Let's not see anymore imageshack/photobucket around here ;) I'll be listening if anyone has some suggestions. EDIT: The server was moved off of shared hosting after about 4 hours of release. It's now on a dedicated server with a 100mb port." I often think about this post and imgur as an example of how an exceedingly simple utility of the Internet can easily acquiesce, and succumb, to the advertising and marketing forces that be[2]. [1] - https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_to_reddit_i_created_an_image_hosting/ https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_t... [2] - https://www.youtube.com/watch?v=ubg0BQi57xE https://www.youtube.com/watch?v=ubg0BQi57xE
- sosborn 10y ago> exceedingly simple yet expensive to run.
- trymas 10y agoYes! I wonder how it started? Did it had some unobtrusive ads or donation since the beginning? It would also be interesting to know how much it costs to run imgur.com (at day one and now). I imagine that the bill that came after first month or a quarter would have been so large that no indie dev could let that have it out of his own pocket, I even doubt that ad or donation revenue would have covered that either. Creating 'a simple image hosting service' is rather easy, but oh boy it's expensive, otherwise there would be gazillion 'simple image hosting services' or imageshack, photobucket and similar wouldn't have become bullshit in the first place.
- Tiktaalik 10y agoGiphy search almost never yields relevant and funny results and I really wish my coworkers would stop using the Slack integration.
- qwrusz 10y agoI realize valuation numbers like this make headlines and are a quick way to proxy success (or lack of) for a startup. But private market startup valuations are about as useful as public market stock prices, i.e. not useful without more context and information. Even if numbers are technically accurate no journalist would ever write 'Apple's stock price 3 years ago was around $700 vs closer to $100 today...so the company must be hurting.' I'm surprised startup valuations reporting has continued for so long without more disclaimers or information in the articles about what a number really means. (side note: I'm also surprised movie weekend box office earnings are as big an interest as they seem, so what the heck do I know). If people are going to leak valuation numbers, is it right to publish this # without knowing or asking a bit more what term sheets look like? For those who might know, how hard would it be to get more accurate info tracking the common equity value for startups?
- dredmorbius 10y agoGIF site Giphy has, along with numerous other of its kin, found its way to my firewall's /etc/hosts blocklist on account of the overuse and abuse of autoplay images on far too many websites. Until such time as browsers and animation-hosting sites refrain from autoplay defaults, and worse: failure to provide any mechanism for overriding this at the device, user, or application level, that shall be my SOP.
- EugeneOZ 10y ago-1 for posting article behind paywall.
- baybal2 10y agowho will give me 600m for lolgifs? I have few stacks of floppies full of them
- beedogs 10y ago> “We believe GIFs are emerging as a format that consumers love and will be really important to advertisers as well,” said Barry Schuler, a partner at Draper Fisher Jurvetson. Do these clowns really believe the shit that comes out of their mouths? Giphy will never make anyone a dime; gotta wonder how they duped people into another seed round.