May 18, 2020 - Economy

Mosseri defends Giphy deal amid scrutiny: "It's not about data"

Photo: Matt Winkelmeyer/Getty Images for Wired

Instagram head Adam Mosseri tells Axios that Facebook spent $400 million to acquire Giphy, the popular platform of sharable animated images, not because it wants to harvest data from the company and its users but because it aims to integrate Giphy's talent and creator ecosystem into Instagram.

Why it matters: Facebook is facing intense scrutiny for its market power, specifically pertaining to the way it leverages user data from acquisitions for advertising.

Details: "On Giphy the most interesting thing to me is how quickly some people jump to data always, which is a reminder of how important privacy is and how often we oversimplify things," Mosseri tells Axios.

  • "On the motivations for Giphy, the short answer is it’s not about data. The three big ideas were keeping the platform going, working with a scrappy creative team with different DNA, and the creator ecosystem given how much we care about that group."
  • "In terms of trends, the bonus that we can learn about what GIFs are trending generally is interesting."

Be smart: The Facebook-Giphy transaction is not subject to any mandatory merger control review, a source familiar with the deal told Axios' Margaret Harding McGill. Such reviews are triggered for deals that reach certain financial thresholds.

  • Still, Facebook is already getting significant blowback for the deal, primarily from open markets and consumer advocate groups.

Mosseri says another big motivation for buying the company was to "keep the platform going."

  • A source close to the deal says Giphy came to Instagram amid financial struggles prior to the pandemic, although conversations were initially more about a partnership than an acquisition.
  • Giphy currently is integrated across most of Facebook's services. Facebook says its apps account for roughly half of Giphy's engagement.

Asked why Giphy will be housed within Instagram and not Facebook more broadly, Mosseri says, "Instagram is very focused on expression, youth and creators, all of which align with Giphy. That said, I’d be excited about them joining anywhere in the company."

  • Giphy is expected to retain its own branding, with its primary integration to come via Facebook's Instagram platform.
  • Instagram accounts for roughly 25% of Giphy's current engagement.

Yes, but: Critics argue that aside from the antitrust concerns, there are copyright problems surrounding Giphy, whose library of images includes many taken from popular TV shows and movies.

  • Mosseri did not answer questions about copyright, but a Facebook spokesperson notes that Giphy's content would be subject to Facebook's existing notice-and-takedown program and repeat infringer policy.

The big picture: Facebook's acquisition of Giphy comes two years after Facebook rival Google bought Giphy's main rival, Tenor.

  • Asked whether the company had that in mind when contemplating the Giphy deal, Mosseri said, "The Tenor acquisition wasn’t a major factor in either direction."
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