Remember when Jeff Bezos agreed to buy the Washington Post back in 2013 for a paltry ~$250 million?
Well, nearly 10 years later, Facebook has reportedly agreed to pay ~$400 million for Giphy, described by Axios as "a popular platform for animated images". The deal comes as the Trump Administration DoJ cranks up anti-trust scrutiny of tech titans.
The takeaway, according to Axios, is that Facebook's powerhouse advertising business will enable it to easily monetize Giphy's content, potentially transforming the business into an extremely profitable one.
Background: A source close to the situation says that the two companies first began talking prior to the pandemic, although that was more about a partnership than an acquisition.
Giphy is expected to retain its own branding, with its primary integration to come via Facebook's Instagram platform.
New York-based Giphy had raised around $150 million in VC funding since its 2013 inception, from firms like Betaworks (which incubated the company), Lerer Hippeau, IVP, DFJ Growth, GGV Capital, and Lightspeed Venture Partners. Its most recent private valuation was around $600 million.
The bottom line: Giphy is a massive video library, with hundreds of millions of daily users that share billions of GIFs, that generates revenue via branded content. Adding Facebook's ad sales and marketing firepower could be what transforms it from a popular service into a highly profitable one.
Adding an extra layer of irony, Facebook this week announced the launch of its "Hateful Memes Challenge" where researchers will compete for a cash prize to develop an AI that can "successfully detect" "hateful memes" (ie anything that anyone finds offensive, probably a much broader category than many realize).
In a blog post, the company admits that it continues to struggle to meet the left's unrealistically high standards for banishing "hate speech" - much of which consists of political speech that makes snowflake lefties uncomfortable. Now, Facebook is gaining control of the world's biggest repository of gifs and memes, giving it even more power to control and censor content on the Internet.
In its blog post about that program, FB explains why developing such an algorithm is so difficult, inadvertently revealing why their previous attempts have accidentally and unfairly banned thousands of users and groups, per Summit.
"In order for AI to become a more effective tool for detecting hate speech, it must be able to understand content the way people do: holistically,” writes Facebook. “When viewing a meme, for example, we don’t think about the words and photo independently of each other; we understand the combined meaning together. This is extremely challenging for machines, however, because it means they can’t just analyze the text and the image separately. They must combine these different modalities and understand how the meaning changes when they are presented together.”
Interesting...we imagine the machines will have an easy time decoding all those absurdist memes that Zoomers love and boomers simply don't understand.
The deal also shows how much our society values 'quality journalism' like the kind produced by the Washington Post. They'd literally think a repository of Cat Gifs is more valuable than the institution that took down a president.