Welcome to the new online world order, according to Facebook’s Mark Zuckerberg. If your platform contains a community that exchanges around visuals, you are at high risk of being a target. Either for competitive destruction or a strategic acquisition. Either way, you will not be left to grow to become a Facebook competitor.

The Social Media Fuel

Mark Zuckerberg knows it yet will not publicly admit it: Any visual content platform is a direct and life-threatening adversary to Facebook. Why? Because visual content initially fueled Facebook’s growth, and it continues to keep it alive. And unlike a proprietary technology, which Facebook doesn’t have, it cannot be defended. Anyone can replicate Facebook’s growth, given the right dosage of community, content, opportunity, and market instinct. Thus the need to continuously cut them at their feet.


Last to experience this strategy is Giphy, a master of traffic. Initially launched as a simple animated Gif search engine, it has slowly evolved as a platform for creating and sharing little snippets of visual emotions. Free of any copyright infringement hurdles – they live in the grey area of transformative fair use – Gifs have invaded everything from social media to text messaging, including more traditional news media. They are deeply rooted in our mobile keyboards and often serves us better than any thousand words.

A 404 gif for Giphy website

A Fire Sale?

No wonder then that in 2019, Giphy was serving 7 billion GIFs per day via a variety of deep integrations, the most prolific being via Facebook-owned apps like Instagram or Whatsapp. Giphy also claimed 700 million daily users, which is a very respectful number in comparison to its peers: 152 million DAU for twitter, 849 million for Instagram, and 229 million for Snap. The issue was that even with those magic numbers and over $150 million raised of the years, commercial viability failed to materialized.

Experiments into promoted branded content showed some promises, but nothing materialized fast enough. It appears that investors grew tired of waiting. When Facebook came knocking pre-Covid 19, they were eager to part ways with their investments, even for a discount. Giphy’s latest evaluation at their last raise in 2016 was $600 million. According to Axios, this deal was closed for $400 million.

Good deal for Facebook? Probably not financially, as they will not seek to turn the platform into a profitable business. Strategically, certainly. Into the wrong hands, Giphy could have turned into a formidable adversary, especially in the younger demographics segments, who speak fluently Gif.

The Modern Pictogram

Richer than images, easier than video, faster to comprehend than text, animated Gifs language is immediately international, and extremely well adapted to the mobile format: One glance and it is understood. The modern pictogram. No need to read, no need to listen, no need to watch for a long time. It reflects society’s collective conscientiousness with instant references to pop culture. Viewers feel immediately included, and they are immensely sharable—the perfect fuel for social media.

By integrating Giphy into its Instagram deal, Facebook guarantees that the mobile app remains relevant to its users for a while longer. It also consolidates its status as the “all things visual” app, forcing competitors to be confined and strictly associated with one format. Instagram thus offers all means of visual expression, while others are only for short videos or instant photos. That is a solid base and will only strengthen its advantage.

This deal only confirms that whoever controls visual content controls online audiences.

Photo by Dazzle Jam from Pexels

Author: Paul Melcher

Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.

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