Facebook swallows GIPHY

Zucks has gone out shopping during quarantine season and made a $400 million purchase.

Facebook is acquiring GIPHY, the biggest online library of animated images called GIFs. GIFs are featured in all of my articles, they look like this: 

“About 50% of GIPHY’s traffic already comes from Facebook apps and half of that from Instagram alone. By bringing Instagram and GIPHY together, we can make it easier for people to find the perfect GIFs and stickers in Stories and Direct.” Vishal Shah, vice president of product at Instagram said in the announcement.

Many questions have been raised about this acquisition. Is this a strategic buy or is something sinister brewing? 

Messaging has been a priority for CEO Mark Zuckerberg in recent years as he plans to enable messaging between all of Facebook’s services. The company has spent a lot of resources encouraging its more than 2 billion users to share more often with features like face filters and stickers.

$400 million to ensure we share GIFs between each other across WhatsApp, Messenger and Instagram seems steep, right? Maybe not. 

With this technology, Facebook can keep an eye on what's picking up buzz, which gives them adequate time to react to what's going on at the ecosystem level. If Facebook can see a certain GIF trending between Whatsapp, Messenger and Instagram, that gives them access to data that companies and brands will pay for. 

That’s not all though.

Facebook will now have reach and visibility into other social media applications like Twitter, Snapchat, Slack, Reddit, TikTok, and Bumble who utilise the GIPHY API. Josh Constine shared this image in his newsletter which paints a clear picture of what FB can now do.

Of course, this has ruffled some feathers in Congress.

“Facebook keeps looking for even more ways to take our data,” Senator 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.”

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Facebook says it will not collect information specific to individual people using GIPHY’s API, but it will get valuable data about usage patterns across the web. To be honest this is what matters. 

According to Wired in 2013, it acquired the VPN app Onavo and later used it to gather data about apps like the messaging platform WhatsApp, which it also bought the next year. Data from Onavo showed that people were sending far more messages a day on WhatsApp than on Facebook Messenger, which helped to justify paying $19 billion for the competing app. Facebook could identify new applications that use the GIPHY API and if they see behaviour as they did with WhatsApp, they will approach and swallow them up. 

Events like these are what set off US regulators and lawmakers. Facebook is already undergoing investigations into whether its practices are anti-competitive.

Competitors who use the GIPHY API will be taking swift action to ensure user data is not compromised before the acquisition is final. Messaging App Signal already made a statement to put its users at ease. 

Facebook can always change the way the API works in the future, but for now, you will be able to use GIPHY as per usual, whether you use Facebook products or not. Expect more GIFs in my articles and a potential return for Mark Zuckerberg to explain himself to Congress.