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Facebook may be forced to sell Giphy one year after buying it
- wodenokoto 5y agoWhat is giphy's revenue stream? Is it just selling what people have searched for? (Or I suppose, informing facebook) Is there really enough data in gif search patterns to be monitizeable?
- DaiPlusPlus 5y ago> Is there really enough data in gif search patterns to be monitizeable? *Yes*
- ryoshu 5y agoThey have brand deals too.
- mcraiha 5y ago"The CMA on Thursday said Facebook could deny other platforms access to GIFs because of the tie-up" I hate to use this phrase, but "and nothing of value was lost".
- nickthegreek 5y agoMy friends as well as my coworkers use giphy all the time in our imessage chat and work slack. Giphy provides me more value than facebook.
- robertlagrant 5y agoSounds like giphy clones are the order of the day.
- pjc50 5y agoThere's an interesting but ignored question of intellectual property here: who owns the rights to the gifs? It's definitely not Giphy.
- cratermoon 5y agoOne could argue that the entire structure of social networking sits on a foundation of playing fast and loose with the rights of others to control the use of their creative output.
- DaiPlusPlus 5y agoI've heard rumours from people-in-the-know that Giphy had some Hollywood connections and got a backroom covenant-not-to-sue from most, but not all, of the major rightsholders - I assume their argument is that widespread use of classic movie GIFs doesn't harm sales, and they'd be in a position to encourage people to use GIFs from current releases - which in-turn drives box-office revenue, so that's the likely explanation.
- leplen 5y agoI had assumed FB bought Giphy in part because Google bought Tenor. It's interesting that the FB acquisition has seen more antitrust scrutiny relative to the Google acquisition.
- ThatGeoGuy 5y agoDidn't _Alphabet_ buy Tenor (not Google)? It seems pedantic but it's probably the over-arching corporate structure that determines the distinction here. Edit: Actually I kind of walk this back. I don't think Tenor has ever stopped providing the same service in an open manner (i.e. via their API), which would be needed to make the argument that there is a competition concern somehow.
- stale2002 5y agoIt is not complicated. In the realm of social media, FB is much more dominant. Companies that are more dominant, almost by definition deserve more anti-trust scrutiny. The closer a company is to being a monopoly, in that specific market, the more that anti-monopoly laws will come in to play.
- marketingtech 5y agoThe "forced sale" aspect is strange to me. I can understand if the CMA could apply stipulations to the deal to address their concerns like "You must offer an API to other platforms that matches your internal usage." But Giphy is a money-losing company that can't exist independently any longer. Forcing a sale to another company/investor when they have zero leverage is a negative outcome for the Giphy team and product.
- ProAm 5y ago> Forcing a sale to another company/investor when they have zero leverage is a negative outcome for the Giphy team and product. That's just business. No one says a business has to be successful or profitable.
- marketingtech 5y agoI'd argue it's not "just business" when a government intervenes (rightly or wrongly) in a free market outcome.
- criddell 5y agoRegulations and subsequent interventions are part of the business environment. It's not that different from environmental regulations that stop companies from just dumping toxic waste in rivers. Properly disposing of waste might make a business unsuccessful.
- bpodgursky 5y agoBy that definition, "business environment" just describes the universe at large. Meteor strikes are part of the business environment. Nuclear war is part of the business environment. Solar flares are part of the business environment. I'm not saying it's wrong in some general philosophical sense, but you've taken a useful phrase and turned it into a useless one.
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- ummonk 5y ago"It says its Instagram subsidiary has committed to continue to allow rival photo and messaging apps to access Giphy’s library." History has proven such a commitment isn't worth the paper it's written on, and the UK watchdog is right to assume Facebook would change its mind down the road.
- creddit 5y agoFacebook didn’t buy Giphy for its use on their own properties. They bought it for analytics on other properties. They love that other messaging apps use Giphy. It’s a Trojan horse.
- maest 5y agoRelated: WhatsApp desktop blocks you from uploading gifs - the only way to share a gif is by using their in-build gif searching tool (powered by giphy). It's grating to see the web app being intentionally limited just to pump their giphy usage numbers.
- WhyNotHugo 5y agoFacebook has already blatantly lied in the past. Like when they said it was impossible to cross data from Facebook and WhatsApp (both services ask for your phone number!), and when they later promised never to cross data between the two.
- hbrav 5y agoWhat happens when you have multiple regulators in different countries that may have different views on the acceptability of an acquisition? Do all of them have to be satisfied that there are not competition concerns?
- dogma1138 5y agoIf you operate in all markets then yes that’s how it usually goes. When it comes to large deals there is always a lot of politics that comes with it well beyond the economics too.
- fy20 5y agoThis is why the EU is a good thing for its citizens and for business. Do you think Facebook are going to even look at a complaint coming from somewhere like the Estonian competition regulator, that represents 1.3 million people? I doubt it, but when it comes from the EU that represents 446 million people it's a different story. It's also good for business too, as you only need to meet one set of regulations instead of one for each country.
- DJPocari 5y agoI was just talking to someone yesterday about how strange it is that Giphy is on Snapchat, even though Facebook now owns it. I thought $400 million was a lot for a GIF platform, but in a world with $28 billion deals like Slack, it doesn't seem too far fetched. The more I think about it, the more it makes sense. It's not just a money making play, but a power play.
- whoomp12342 5y agogood, I hate what it has become.
- alanlammiman 5y agoMy company runs one of the top iPhone apps for creating & exporting stickers to WhatsApp (and iMessage, Telegram & others). When WhatsApp started accepting animated stickers, we implemented the Giphy API to allow users to get GIFs and export them as animated stickers to WhatsApp (yes, from one Facebook product to another). Giphy rejected our application and blocked our API access claiming that their API Terms of Service prohibited what we were doing, which they did not in fact appear to do (we had read the terms before going to the trouble of implementing). No point arguing as the terms do say that they reserve the right to deny or revoke access at any time (in line with the CMA's concerns). So we just switched to Google's Tenor and ironically that has worked fine. Perhaps I should be writing a letter to the CMA!
- g_p 5y agoYou absolutely should! Something bodies like the CMA often struggle to get is the "evidence of harm" which validates their concerns. Your story is a real example of a competitor or business actor being harmed in precisely the way the CMA hypothesised. It's absolutely worth writing a response to them, explaining your story and what happened, and whether you support their proposed remedy. Facebook and all their lobbyist friends will be submitting responses saying they entirely disagree and this action will cripple the digital economy and nobody will gain from it. You can explain how you are a rival in the ecosystem, and were actively harmed by their actions that the CMA has hypothesised could happen. Having people affected get in touch and do this can really help the CMA to justify standing firm with their findings in the face of the lobbyist doomsayers.
- echelon 5y agoThat's such an asinine decision. They're gifs, ffs! Please take the effort to document this and write the CMA. If you do, I'll send you $100. I know that's not much, but this is important and worth the effort.
- umvi 5y agoIt took me a few minutes to figure this out since I hadn't RTFA yet, but in this context, CMA = Competition and Markets Authority (a UK regulatory body) https://en.wikipedia.org/wiki/Competition_and_Markets_Authority https://en.wikipedia.org/wiki/Competition_and_Markets_Author...
- ryandvm 5y agoIt's kind of an indictment of the industry that a 30 year old, 8-bit image format somehow won out as the medium of choice for displaying looping animated scenes. What cascade of negligent decisions had to happen that all the other viable options (APNG, WEBP, looping MP4) were overlooked at companies like Google, Facebook, and Apple? How many fucking gigawatts have been wasted blasting that shitty bloated image format across the internet?
- colejohnson66 5y agoGiphy supports WEBM in addition to GIF. It’s just called what it is as an homage.
- deleted 5y ago[deleted]
- toast0 5y agoIt's mostly just looping movies with no sound with a modern codec, people just call them gifs because they briefly were. There was some pushback on the misleading name, but nobody listened, words are fluid.
- anownymous 5y agoBeen expecting this for sometime now..
- treelovinhippie 5y agoFacebook acquires Giphy. Regulators: shooketh Facebook acquires Instagram, WhatsApp and Oculus. Regulators: crickets
- benrapscallion 5y agoMaybe because these happened under different presidential administrations?
- DaiPlusPlus 5y agoThe CMA is entirely independent of the United States' executive branch. Heck, it's entirely independent of the United States to boot.
- benrapscallion 5y agoFTC is, on the other hand, very much related to the presidential administration.
- DaiPlusPlus 5y agoFacebook acquired Giphy after it acquired Instagram, WhatsApp and Oculus. My understanding is that the CMA and other regulatory bodies, have seen their remit and purview increased since those initial acquisitions after the negative societal consequences sunk-in - which is why now we're hearing about them take-issue with Giphy. We don't want another AOL|TimeWarner - we also don't want another _Dark Sky_...
- M2Ys4U 5y agoRegulators have learned that Facebook will lie to them about their acquisitions after the Instagram, WhatsApp and Oculus deals. Hence the stronger action against them now.
- hncurious 5y agoImagine starting a GIF site 8 years ago, in 2013. Would you ever have thought it could sell for $400M?
- stoicjumbotron 5y agoSo true. Would the similar thing happen in current times? As in creating a service so simple no one has thought of, yet, has a widespread use so to speak?
- omarhaneef 5y agoIt’s almost certainly happening right now but we won’t know which simple service will be worth hundreds of millions for some years.
- TroisM 5y agothe number of users is key, probably
- sp332 5y agoThe question is how to avoid losing money on every user.
- xmprt 5y agoI'm also surprised they managed to get around copyright infringement. Posting 10 second clips of TV shows as GIFs still doesn't count as fair use I'm pretty sure.
- annadane 5y agoIt bothers me just in general how Facebook will respond to antitrust action with "But you allowed it at the time!" Yes, but you also directly lied about your intentions and went right ahead and did the thing you said you weren't going to do with these products, be it Insta or Whatsapp or whatever
- jarofgreen 5y agoQ: What standing does the UK have here, and assuming Facebook lose any appeals, could they actually force the sale? (And I ask as someone in the UK; not trying to bash, genuinely curious about regulators and international issues)
- cdirkx 5y agoI think how it works is not exactly that the UK can force the sale, but they can deny Facebook access to the UK market if they don't follow the rules set out by regulators. It is up to Facebook to decide whether that is worth it, similar to the issue between Google and newspapers in Australia or following GDPR in the EU.
- WhyNotHugo 5y agoGiven that the US is basically unwilling to take antitrust seriously, I hope the is the start of a new trend where _someone somewhere_ is working on avoiding these kind of pro-monopoly acquisitions.