Bottom line: Facebook has made a number of shrewd acquisitions over the years including WhatsApp and Instagram. Will its latest purchase of Giphy also fall into that category or will it ultimately come up short?
Facebook on Friday announced that it has acquired Giphy and will be integrating it into the Instagram team. Financial terms of the agreement were not shared although according to Axios' sources, the deal is valued at around $400 million.
Giphy was founded by Alex Chung and Jace Cooke in early 2013, first as a search engine for GIFs. The service proved immensely popular right out of the gate and shortly after, it was expanded to share GIFs on both Facebook and Twitter.
By 2017, Giphy had amassed over 200 million daily users.
In today's announcement, Facebook said that 50 percent of Giphy's traffic comes from the Facebook family of apps (and half of that comes directly from Instagram).
To date, the company has raised around $150 million in venture capital.
Sources familiar with the matter told Axios that the companies started talking before the pandemic although initially, it was more about a partnership than an acquisition.
Looking ahead, Giphy will continue to operate as users have come to expect. Users will still be able to upload GIFs, developers and API partners will still have the same level of access they enjoy today and the creative community will still be able to "create great content."