As advertising revenue begins to take a bigger hit due to the coronavirus pandemic, Facebook is making a significant bet to diversify its toolkit with the reported $400 million Giphy acquisition. The news signals that the social giant could be looking to take advantage of a down period to strengthen its core products, even as scrutiny of M&A at this time is on the rise among some lawmakers. Giphy and Facebook were in discussions prior to the public health crisis, Axios reported, but those talks were centered more on partnerships than an acquisition.
Giphy is incredibly popular as a hosting service for GIFs that people like to share on social media and in messaging apps. The company was last privately valued at $600 million, Axios said. Brands increasingly view GIFs as an opportunity to connect with mobile-minded consumers, and major marketers like Wendy’s, Pepsi, and Midol have recently run campaigns using Giphy.