3. Instagram boss: Giphy purchase not about data access
Facebook's $400 million Giphy deal was an effort to tap the service's talent and creator ecosystem rather than to harvest data from users and partners of the shareable animated image platform, Instagram boss Adam Mosseri told Axios' Sara Fischer.
Why it matters: Facebook is facing intense scrutiny for its market power, specifically pertaining to the way it taps user data from acquisitions for advertising.
"On the motivations for Giphy, the short answer is it's not about data," Mosseri said in an interview.
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 users of its apps account for roughly half of Giphy's engagement.
As for why Giphy will be housed within Instagram and not Facebook more broadly, Mosseri said, "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 noted 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.
- "The Tenor acquisition wasn't a major factor in either direction," Mosseri said.