Facebook’s Acquisition of Giphy May Be About User Data

Facebook is currently the one biggest social network in the world – and history. Almost a third of the entire plant’s population is actively using Facebook, and there are also those who use other services owned by the company – WhatsApp and Instagram, among others. To this already massive number, Facebook just added around 65 million with the acquisition of the internet’s favorite GIF search engine, Giphy.

Facebook bought Giphy, a service it called “a leader in visual expression and creation” in its announcement, in the middle of May, for a hefty $400 million. The service is well-known to Facebook users – actually, half of Giphy’s traffic already came from Facebook – and its API is integrated with all Facebook services. It was not a very profitable service, though. So why did the social media giant invest such a sum in the company?

Big Data

Giphy has a huge, searchable database of GIFs – short, animated images that can be called up on social media and instant messaging platforms through its API. It has received a lot of venture capital but it was just getting started in the world of paid advertising – it has just recently started allowing companies to sponsor GIFs or add video overlays to them. So, the acquisition is likely not about advertising revenue (unless, of course, the social media giant has something up its sleeve that it has not shown the world yet).

What’s more likely, in turn, that the acquisition is about data. While half of the service’s traffic comes from Facebook and related services, the other half comes from everywhere ranging from Apple’s iMessage to TikTok. The data thus gathered will give Facebook valuable insights on the trends and hot topics the users of these services are interested in, and allow it to target its ads much better across its own services.

Besides, the sudden growth of API calls from an app or service can suggest that said app or service is growing fast – and this is something Facebook will want to know about, both from product development and content production point of view.

New Facebook services coming

When it comes to content consumption habits, Facebook seems to be insatiable. Just recently, the social network started rolling out its News service, similar to a cross of a content aggregator and a social network. The service offers its users a new way to consume news content – something many of its users already rely on it to do on a daily basis – that allows people to hide articles or publishers they don’t like, discover new topics, and have a brand new interface that delivers their news filtered by their interests right into their Facebook app. The service is currently only available in the US but it will be rolled out across the world later in the year.