How Does Giphy Make Money? Business Model Explained!

Social media sites such as Facebook, Twitter, and others have made GIF images ubiquitous, and they are increasingly being used as forms of expression. The user could attach a GIF video clip of someone laughing hysterically instead of using the Internet slang “LOL” for “laughing out loud.”

Graphics Interchange Format (GIF) is a popular bitmap image format introduced in 1987 by CompuServe. Giphy, which offers a searchable database with tens of millions of GIFs, is bringing GIFs mainstream. As GIFs gain popularity among social media users and advertisers, Giphy is on its way to becoming the next content king.

Facebook’s parent company, Meta Inc., liked the service so much that it purchased it for $400 million in May 2020 and plans to integrate it into its Instagram and Messenger platforms. While the merger is being reviewed, the two companies have been ordered to “operate separately” due to possible antitrust violations.

Giphy Business Model

GIFs are being used as social expressions as a result of the popularity of emojis, which can be used to convey feelings at any time. A large number of GIFs on social media are soundless, looped video clips of a character or scene from a TV show or movie, which can be more expressive and dynamic than an emoji.

Giphy was founded in 2013 by Alex Chung and Jace Cooke, who wanted a way to express feelings through GIFs instead of words. Since May 2020, the database has grown significantly, with 700 million users accessing more than 10 billion GIFs per day.

GIF images are found by searching for a keyword and then selecting from the results. The image can be copied and pasted into a text message or shared on social media. Giphy recently released a mobile app for tablets and smartphones.

Furthermore, Giphy has grown on the content creation side as well. The Giphy website, which offers artists tools to create dazzling GIFs out of animations and video footage, for example, allows individuals and businesses to make their own GIFs. A gallery of artist creations can be found on the website.

Giphy CAM allows users to make GIFs using footage recorded with their smartphone cameras. Users can upload footage to Giphy, where desktop tools are provided for creating the GIF, and then seamlessly share their creations. Giphy and Disney partnered during the promotion of the Star Wars movie The Force Awakens in 2015 to add a filter that causes ships from the movie to fly in videos.

Despite the fact that no money was exchanged for that particular arrangement, Giphy’s revenue generation strategy becomes clearer.

How Giphy Makes Money

So far, Giphy has not generated any revenue, as it does not charge a fee for its apps or use an advertising model. Since its inception, the company has raised $150 million in venture capital funds. In 2020, Meta valued Giphy at $600 million when it acquired the company.

Giphy’s founder shared with Digital Trends in 2019 that “the future is about Giphy bringing short-form entertainment to messaging.” Giphy has plans to expand into multiple platforms, including video.

As content and advertising partner, Giphy should be an appealing prospect thanks to both its search engine and its complete social integration.

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