how Giphy’s multimillion-dollar business went out of style

how Giphy’s multimillion-dollar business went out of style

It’s rare for a multimillion-dollar company to explicitly state that its business is dying because it’s just too ugly to live on.

But that’s the bold strategy that gif search engine Giphy has adopted with the UK competition regulator, which is looking to block a $ 400 million (£ 352 million) takeover attempt by the UK. owner of Facebook, Meta.

In a filing with the Competition and Markets Authority, Giphy said there was simply no company other than Meta that would buy it.

Its valuation has dropped $ 200 million from its 2016 peak, and more importantly, its main offering is showing signs of going out of fashion. “There are indications of a general decline in the use of gifs,” the company said in its repository, “due to a general decline in user and content partner interest in gifs.

“They have gone out of fashion as a form of content, with younger users in particular describing gifs as ‘to boomer’ and ‘cringe’.”

To emphasize the point, Giphy’s repository included links to several articles and tweets.

The generation gap is real, says Internet culture writer Ryan Broderick. “The gifs look extremely dated. They were never easy to make and didn’t work particularly well on mobile devices.

“So now I’m basically the creepy reaction image your millennial boss uses in Slack. Rather than what they once were, which was a decentralized type of image for communicating on blogs and message boards. It’s actually a little sad how much gif has been stifled by big corporations, copyright laws and mobile browsers. “

Even the animated gif is comfortably millennial: invented in 1989, it is antecedent not only to smartphones and social networks, but also to the world wide web. It exploded in popularity along with the rise of the web as the easiest way to add movement to a page, but it slowly lost ground to other ways of displaying images that required less than the limited bandwidth of the time.

Its rebirth came at the turn of the 2010s, along with the growth of the social network Tumblr. Although gifs were never meant to replace videos, faster internet connections meant they were again the easiest way to share short clips – too short to have meaning on their own but perfect for adding context and color to posts in the form. of “gif of reaction”.

Popularized by Tumblr blogs like What Should We Call Me, which curated a perfect selection of responses to any situation, reaction gifs quickly became synonymous with the format itself. Why reply to a post with “OMG” when you can post a short clip of Donald Glover from the sitcom Community walking into a burning room carrying a stack of pizzas?

At the height of its cultural impact, creating, publishing and curating gifs could easily have become a full-time job. The best creators were known for the speed with which they could crop shareable moments from TV shows or live events as they aired, as well as their ability to change the format to keep the frame rate high and the file size low.

But while the more dedicated posters kept large archives of their most used gifs, carefully sorted and labeled, for many, tracking down exactly the right one to use in every situation was a bore.

This was the problem that Giphy tried to solve when it was founded in 2013. As a “search engine for gifs”, the company has collected more than 300,000 from across the web, tagged and classified them, and helped users. to find exactly the right one for any given situation.

“Giphy was thought of for breakfast with my project partner, Alex Chung, as he reflected on the rise of purely visual communication,” co-founder Jace Cooke said in a 2013 interview with the Daily Dot. “We both couldn’t forget how cumbersome it still was to find and share gifs and we thought we could do something about it.”

But democratizing gifs have also sown the seeds for their destruction. “By design or intent, Giphy’s search tools have led to considerable monotony in gif culture,” said Brian Feldman, an internet culture writer in 2020.

“The same principles that apply to Google also seem to apply to Giphy: if you’re not in the top three, you might not even exist. The reaction gifs have become flattened and less diverse. “

Technical changes exacerbated the problem. The same reasons that the gif died the first time had not disappeared: the technology produces large files with poor image quality.

While sites like Twitter and Facebook have built in support for posting gifs, they’ve also tweaked them, turning them into video files for more efficient viewing on mobile devices. This meant that users couldn’t just download a gif they saw and save it for later, which further flattened the available selection.

The best gifs of last year tell their story. As Giphy grew as a company, to the point where its annual revenue is now estimated at $ 27.5 million by GrowJo analysts, it also ran into another problem: copyright.

The company’s response was to partner with the media to host original gifs, and today nine of the top 10 gifs on the site in 2021 were posted there by the company that made them, in a cross-promotional push to encourage viral content. .

Related: Georgie Carroll: the 10 funniest things I’ve ever seen (on the internet)

The # 1 gif of 2021 was a slow zoom on the character Stanley from the American version of The Office: a clip from a 15-year episode of a show that was old even before Giphy’s founding. Second place is a clip of Tom, Tom and Jerry falling asleep on a pillow; the third comes from a contemporary source, a shot from Bake Off that looks shocked. Only one, a cartoon of a happy fat duck dancing, was created by someone who wasn’t a major media partner.

Giphy even lists “her ability to retain key content partners” as the main reason the CMA allows her to proceed with the Meta acquisition, arguing that a less respected owner could jeopardize relationships.

But the gif also surpassed Giphy. Gif keyboards in apps like WhatsApp and Twitter may not all use the service – there are also competitors like Tenor, which was acquired by Google for an undisclosed amount in 2018 – but they all have the same effect: making it easier for people to send shareable clips to each other quickly. And yes, that includes boomers.

The best gifs of 2021

1. Stanley bored with the US office

2. Tom tired of Tom and Jerry

3. Liam shocked by The Great British Bake Off

4. Sad Pokémon Pikachu

5. Agatha Harkness winks from WandaVision

6. Peppa Pig says “¡Feliz Cumple!” from the Spanish language Peppa Pig.

7. The weekend performing at the Super Bowl

8. Daphne Bridgerton laughs from Bridgerton

9. A happy dancing duck from the Foodieg animator

10. Happy Baby Yoda from the Mandalorian

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