Yahoo Finance Gen Z’s dislike of gifs threatens our future, says Giphy
Generation Z has fallen out of love with "cringe" animated files in a change of tastes that threatens the future of tech company Giphy if it is forced to reverse a takeover by the parent company of Facebook, bosses have said.
The business, which lets users share animated “gif” files via messaging apps, said it has suffered from a downturn since being acquired by Meta in a $315m (£272m) deal in 2020.
In a letter to the Competition and Markets Authority (CMA), Giphy claimed that its meme-sharing product had “fallen out of fashion as a content form, with younger users in particular describing gifs as ‘for boomers’ and ‘cringe’.”
The CMA has argued that Meta’s takeover of Giphy harms competition by blocking innovation in advertising. It has ordered them to unwind the deal.
Meta claimed that Giphy’s business was in danger of collapse before the takeover. Last month, a court halted the CMA’s forced sale of Giphy after it found the regulator had not provided Meta with adequate disclosures ahead of its final report.
The regulator must resubmit its report before it can demand the divestment is completed.
Giphy, however, warned the regulator that its business had weakened in the two years since the takeover was announced and it could struggle to find another buyer. It added that any sale would come with “considerable risks”.
Younger internet users have stopped sharing as many of its gifs, the company said. The CMA’s investigation had also prevented it from making money through its merger with Meta.
Giphy added that its advisers JP Morgan had already tried to sell its business to Amazon, Apple, Snap, Twitter, TikTok-owner ByteDance and Adobe. All declined to buy it after initial talks were held in 2020.
The CMA’s efforts to split Giphy and Meta are the first time it has ordered a Big Tech company to unwind an acquisition, as it clamps down on mergers that regulators believe could harm future innovation.
Competition authorities are taking an increasingly hard line on technology takeovers after failing to intervene in critical mergers such as Google’s $3bn acquisition of Doubleclick in 2007, which turned it into an advertising giant, and Facebook’s deal for Instagram.
