Facebook is buying gif-searcher Giphy for around $400 million. That’s no drop in the ocean. But it is a 50% drop on Giphy’s most recent valuation: even gif-sharing has been picked off by the pandemic.
Facebook already constitutes are half of Giphy’s 300m-or-so active daily users, with half of those users sharing Giphy content via Instagram (Giphy claims that 700m people see its content every day). So what is Facebook actually getting from the deal?
The short answer, perhaps, is data. Each Giphy search sends information about its context, and the emotion the user hopes to convey, back to the company’s New York HQ. Giphy stresses that it uses no tracking pixels cookies or other tracking devices. The company may only see a user’s search terms – not their data.
But the tech and privacy communities have been rocked by the news. Facebook’s purchase allows it to look under 2013-founded Giphy’s hood, and help make sense of its vast banks of data. That is good news for Facebook—which can use Giphy’s integration with dozens of keyboards and platforms to peer into many corners of the Web—but it’s a potential disaster for those trying to uphold privacy.
And that’s just for now. It is unclear what Facebook plans to do with Giphy just yet. It wouldn’t be a stretch to suggest the social media giant will bring Giphy more into line with liberal attitudes to user privacy that help value Facebook at a shade under under $500bn.
Whether it can do so without destroying Giphy’s user base is unknown. Facebook could pull Giphy from rivals like Twitter and Slack, opening the door for a younger, more privacy-focused gif searcher like Gfycat or GIFWrapped to muscle in. In a May 15 statement, Facebook VP of product Vishal Shah, said it plans to invest “further in (Giphy’s) technology and relationships with content and API partners.”
A typically cryptic Facebook announcement, then. Facebook’s buy doesn’t just provide us with more business-model questions than answers. It’s a potential wake-up call to media platforms that value privacy.
Secure messaging app Signal, which offers Giphy integration, responded to the news by stressing that it “already uses a privacy preserving approach to prevent gif search providers from receiving user data.” Similar platform Telegram announced that it is transitioning away from Giphy.
Their contribution to Giphy’s user base is small. But the future for Giphy may say a lot about public views on digital privacy for years to come.