The Chicago Journal

Snapchat’s Evolving Landscape: A Quest for Monetization

Leah Cooper Leah Cooper on December 4, 2023

From Teen Playground to Profit Hub

Snapchat’s journey from a teen-centric app to a potential profit powerhouse has reached a critical juncture. When Snapchat announced last month that it had reached 5 million paying subscribers for its Snapchat+ service, it seemed like a stunning achievement. The milestone marked the halfway point to the 10 million subscriber number that CEO Evan Spiegel had just months earlier identified as a “medium-term” goal. The service’s success in just 15 months after launching proved that despite Snapchat’s reputation as an app used mainly by teens, users are willing to cough up money for a premium experience on the platform. At 5 million subscribers paying $3.99 per month, Snapchat+ is set to earn around $239 million in annual revenue.

The Challenge of Monetizing Growth

Snapchat’s surging user base hasn’t been mirrored in revenue growth. In the first six months of this year, sales dipped by more than 5% compared to the year-ago period, and it posted an operating loss of $769 million. Snap’s (SNAP) shares are down more than 11% since this time last year. The sales declines come as Snapchat, like other platforms, works to update its advertising business to cope with changes to Apple’s app tracking policies. And it comes as the company funnels money into innovations in artificial intelligence and augmented reality. Snap has also faced lawsuits from parents alleging the app contributed to their children’s mental health struggles or enabled them to buy illicit drugs, with sometimes fatal outcomes. Still, analysts say Snap’s user growth continues to represent a major opportunity for the company.

Unique Focus Amidst Competition

Despite its reputation as a platform mainly for young people with less reach and cultural relevance than rivals like TikTok, Instagram, and Facebook, Snapchat’s core mission is to allow users to have more private conversations with their friends. This unique focus on interpersonal and small group interactions is essential, especially to younger social media users who don’t want to broadcast their entire lives to mass audiences as they would on TikTok or Instagram.

Aiming to overtake TikTok

Snapchat says that much of its daily user base is distinct from other platforms, according to a study of 10,000 users conducted on Snap’s behalf by market research firm GWI during the first half of 2023. The group found that 43% of the people aged 16-64 who used Snapchat did not use TikTok, and more than half of daily Snapchatters in the same age range were not using YouTube on a daily basis.

Monetizing a Messaging Platform

Monetizing a messaging platform like Snapchat is a significant challenge. Unlike platforms like Instagram and TikTok, where users frequently discuss specific products, Snapchat has traditionally leaned more heavily into brand awareness. While there still is brand advertising online, there are many challenges and discussions about what this looks like going forward. Snapchat’s emphasis on user privacy may be a boon to users but a challenge for advertising. Additionally, Snapchat’s lower user engagement time, compared to rivals, impacts its advertising potential. The average Snapchat user in the third quarter of 2023 spent just 19 minutes per day on the app, compared to 103 minutes per day on TikTok, 60 minutes per day on Instagram, and 28 minutes per day on X.

Promising Signs and Future Prospects

Snapchat’s task now is to make a meaningful profit from all of those users. Despite the challenges of monetizing messaging platforms, Snap is actively investing in improving its direct response advertising business. Snap’s active advertisers were up 20% year-over-year, showing promising signs. Snapchat’s frequent user check-ins, around 40 times a day, show potential for engagement. Snapchat is committed to enhancing its ad platform, poised to capitalize on the growing user base in the future.

Utah approves a bill for social media control for kids

Nicholas Alexander Nicholas Alexander on September 5, 2023

Utah – The world has been moving toward a new era of technology and social media for more than a decade.

Many users started using the platforms as teenagers and grew up with them, and their children now want to join in on the fun.

Yet, there has been a heated controversy about whether they should even be permitted on the platforms in the first place.

Utah’s governor signed a contentious bill to safeguard children online on Thursday.

The news

Utah’s governor approved legislation requiring minors to obtain parental consent before opening social media accounts on a variety of sites.

The bill is widely regarded as the most extreme action taken by state or federal politicians to protect children online.

The Utah Social Media Regulation Act includes the following regulations:

  • Social media platforms must conduct age verification for Utah residents
  • Band ads for minors
  • Impose an online curfew
  • Restrict sites between 10:30 pm to 6:30 am for those under 18
  • Parents must be able to access their teens’ accounts

The legislation

Republican Senator Michael McKell presented the legislation, which was later signed into law by Republican Governor Spencer Cox.

It will become effective on March 1, 2024.

McKell talked on how the rise of social media has increased anxiety, sadness, and suicide thoughts among Utah and nationwide children.

“When it comes down to it, [the bill] is about protecting our children,” he said.

“As a lawmaker and parent, I believe this bill is the best path forward to prevent our children from succumbing to the negative and sometimes life-threatening effects of social media.”

The legislation is also the result of years of campaigning by American politicians for protections to protect children and teens online.

Fears about young users falling into harmful rabbit holes have persisted, leading to a new type of abuse and harassment.

Additionally, social media is said to have aggravated what is regarded as a teen mental health crisis in the United States.

As a result, no federal law has been enacted.

The states and proposals

Utah is the first state to pass laws emphasizing children’s internet safety.

They are not, however, the only ones who have designed such a plan.

Legislators in Connecticut and Ohio, for example, are attempting to introduce laws requiring social networking firms to obtain parental consent before allowing users under the age of 16 to join.

“We can assume more methods like the Utah bill could find their way into other states’ plans, especially if actions are not taken at the federal level,” said ABI Research analyst Michael Inouye.

“Eventually, if enough states implement similar or related legislation, we could see a more concerted effort at the federal level to codify these (likely) disparate state laws under a US-wide policy.”

Read also: Chicago mayoral race debate was heated

Concerns

Experts and Big Tech companies have long lobbied the US government to enact legislation to protect younger social media users.

Even before the bill was passed, many people voiced worries about its implications.

According to the Electronic Frontier Foundation, Utah’s limitations are harmful to user privacy.

According to the organization, the law would also make user data less safe, internet access less private, and infringe on young users’ basic rights.

“Social media provides a lifeline for many young people, in addition to community, education, and conversation,” said EFF director of activism Jason Kelley.

“They use it in part because it can be private.”

“The law, which would limit social media access and require parental consent and monitoring for minors, will incalculably harm the ability of young people to protect their privacy and deter them from exercising their rights.”

Lucy Ivey, a TikTok influencer and Utah Valley University student, agreed with the thoughts of the group.

She argued that the change will provide difficulties for her LGBT colleagues.

“My worry with this bill is that it will take away privacy from teenagers, and a lot of kids don’t have good relationships with their parents or don’t have a reliable guardian that would be needed to get access to social media,” said Ivey.

“I think about my LGBTQ friends; some who have a hard time with their parents because of their sexuality or identity, and they could be losing an important place where they can be themselves, and be seen and heard.”

Ivey created Our Era when she was 15 years old, later expanding her production on TikTok, where she voiced worry about the bill’s ramifications for content creators like herself.

“With a new law like this, they may now be intimidated and discouraged by the legal hoops required to use social media out of fear of authority or their parents, or fear of losing their privacy at a time when teens are figuring out who they are.”

Meta, Facebook’s parent corporation, stated that it shares the same aims as parents and politicians.

Yet, by providing easily accessible platforms, the company encourages young people to have a fun and safe online experience.

Antigone Davis, Meta’s worldwide head of safety, stated that the firm will continue to collaborate with experts, governments, and parents to address the challenges.

Even though the Utah legislative procedures are problematic, Inouye believes that the early efforts to fix the issues are limited.

…

Social media faces more regulations in 2023

Edward Anderson Edward Anderson on March 20, 2023

…

Social media: The bipartisan spending bill passed by Congress last week essentially forbade the installation of TikTok on devices used by the government.

This year, advocates and legislators revealed proposals for tighter regulation of social media companies as 2023 kicks into gear.

TikTok

The video-sharing app, which receives more than 1 billion monthly users, is owned by the Chinese corporation ByteDance.

Christopher Wray, the director of the FBI, and lawmakers have publicly stated their positions on TikTik’s ownership structure.

They claimed that the structure exposes information about US users.

In addition, Chinese-based businesses are compelled by law to provide the government with user information on request.

The concern

The National Intelligence Law of 2017 and the Counter-Espionage Law of 2014 are the two Chinese laws that have alarmed the US government since 2019.

According to the Counter-Espionage law, businesses and individuals “may not refuse” to divulge information when the state security agency conducts an espionage investigation and discovers crucial information.

Organizations or people are expected to support, help, and cooperate with governmental intelligence initiatives, as stated in Article 7 of the Intelligence Law.

The state also protects those who assist them.

Response

Despite TikTok’s repeated assurances that US user data is not kept in China, little has changed from their comments.

TikTok has been compared to “digital fentanyl” by Wisconsin Republican Rep. Mike Gallagher.

Additionally, he thinks that the software has to be banned outright nationwide.

“It’s highly addictive and destructive,” said Gallagher.

“We’re seeing troubling data about the corrosive impact of constant social media use, particularly on young men and women here in America.”

Read also: Migrants delivered to Kamala Harris on Christmas

Social media regulation

Twitter, YouTube, and other social networking sites, like TikTok, use the same algorithms, claims Facebook whistleblower Frances Haugen.

She thinks that increasing the transparency of their operations should be the regulators’ first move.

According to Haugen, the majority of people are unaware of the US’s gap in social media regulation compared to other countries.

“This is like we’re back in 1965,” said Haugen. “We don’t have seatbelt laws yet.”

Tech bills in 2022

Congress failed to pass some of the most radical elements of technology-related legislation the year before.

Antitrust law and a bill aimed at protecting children were among the legislations that were vetoed.

Antitrust legislation

Early in 2022, lawmakers created a bill that specifically targeted Apple’s and Google’s app stores for mobile devices.

The legislation also placed limitations on developers.

The American Innovation and Choice Online Act was advanced, which has some of the same objectives.

The Act forbids larger companies from unfairly treating or preferring their own products over those of competitors.

The plan states that developers would not be required to use the platform’s payment method for distribution if the app store had more than 50 million US users.

Additionally, app developers cannot be punished for selling their products elsewhere for a lower price.

Kids Online Safety Act

In November, bipartisan legislation was launched by Senators Marsha Blackburn and Richard Blumenthal to put regulations on websites that children 16 and younger can view.

The proposed law would compel platforms to restrict content that could cause minor users bodily injury or psychological trauma, including the following:

  • Self-harm/suicide
  • Encouragement of addictive behavior
  • Enabling online bullying
  • Predatory marketing

Additionally, websites have to follow the law’s requirements regarding connection restrictions and default privacy settings.

Even after the legislation underwent changes, several organizations still opposed it.

Read also: Sherrod Brown looking to have cryptocurrency banned in the US

Change

There is still a patchwork of state rules dictating how to maintain customer data, even though Congress made significant progress toward a consensus measure on national privacy standards in 2022.

Many of the bills that have reached the Senate floor enjoy bipartisan support, according to Senator Amy Klobuchar.

However, she cautioned that the tremendous influence of the tech industry might cause huge bipartisan support to collapse over the next 24 hours.

According to Klobuchar, the American people won’t demand social media company reform until they declare that “enough is enough.”

“We are lagging behind,” said Klobuchar.

“It is time for 2023, let it be our resolution, that we finally pass one of these bills.”

References:

More social media regulation is coming in 2023, members of Congress say

Huawei says it would never hand data to China’s government. Experts say it wouldn’t have a choice

Senate committee advances bill targeting Google and Apple’s app store profitability

Kids Online Safety Act may harm minors, civil society groups warn lawmakers

Teenagers using social media should be older than 13

Jason Robinson Jason Robinson on March 13, 2023

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Teenagers: In the digital age, social media has had a big influence on people’s daily lives.

The bulk of users are millennials, who have grown up with technology and shaped the internet world.

On the other hand, Gen Zs are developing and starting to use social media as early as 13-year-old teenagers, according to experts.

Finding their identity

Children should wait until they are 13 years old to create profiles on social networking sites, according to US Surgeon General Vivek Murthy.

Murthy emphasized that although many websites allow teenagers that old to sign up, they are still just trying to figure themselves out.

For the social networking sites listed below, 13-year-olds can sign up:

  • Facebook
  • Instagram
  • Snapchat
  • Snapchat
  • TikTok
  • Twitter
  • Wink

“I, personally, based on the data I’ve seen, believe that 13 is too early,” said Murthy.

“It’s a time where it’s really important for us to be thoughtful about what’s going into how they think about their own self-worth and their relationship and the skewed and often distorted environment of social media often does a disservice to many of those children.”

Concerns

The growing usage of social media among teenagers worries medical specialists.

They emphasized a number of academic research on the potential harms that the platforms may do to teenagers.

Vivek Murthy recognized that it would be difficult to discourage teenagers from using social media given their widespread use.

However, parents could succeed if they put up a unified front.

“If parents can band together and say you know, as a group, we’re not going to allow our kids to use social media until 16 or 17 or 18 or whatever age they choose,” he offered.

“That’s a much more effective strategy in making sure your kids don’t get exposed to harm early.”

Read also: RxPass joins array of Amazon projects in the pharmacy market

Psychological effects

Teenagers who use social media frequently have their brain chemistry changed, according to recent research.

According to a research that was released in January by JAMA Pediatrics, teenagers who often check social media exhibit increased neuronal sensitivity in some regions of their brains.

Their brains are more sensitive to social repercussions as a result.

Psychiatrist Dr. Adriana Stacey and her colleagues have raised the topic throughout the years.

The majority of the people Stacey deals with are college students and teenagers, and she claims that using social media causes a “dopamine dump.”

“When we do things that are addictive like use cocaine or use smartphones, our brains release a lot of dopamine at once,” she said. “It tells our break to keep using that.”

“For teenagers in particular, this part of their brain is actually hyperactive compared to adults. They can’t get motivated to do anything else.”

More time spent in front of a screen may affect brain development, according to recent studies.

For instance, younger children’s less developed reading and language skills were substantially connected with increased screen usage.

Lawmaker reacts

Democratic Senator Chris Murphy has heightened concerns about social media.

He recently expressed his worries regarding social media in an opinion post for Bulwark that addressed loneliness and mental health.

“We have lost something as a society, as so much of our life has turned into screen-to-screen communication,” said Murphy.

“It just doesn’t give you the same sense of value and the same sense of satisfaction as talking to somebody or seeing someone.”

The senator and surgeon general are both intimately familiar with the negative impacts of social media addiction.

Both Chris Murphy and Vivek Murthy are fathers; while Vivek has small children, Murphy has teenagers.

“It’s not coincidental that Dr. Murthy and I are probably talking more about this issue of loneliness more than others in public life,” said Murphy.

“I look at this through the prism of my 14-year-old and my 11-year-old.”

Chris Murphy went on to claim that the US is not a defenseless nation despite confronting Big Tech.

He thinks that government could take a number of steps to prevent teenagers from using social media, while also pressuring businesses to develop less addictive algorithms.

When speaking about the problem of addictive algorithms, Murthy claimed that teenagers and Big Tech aren’t in a fair fight.

“You have some of the best designers and product developers in the world who have designed these products to make sure people are maximizing the amount of time they spend on these platforms,” said the surgeon general.

“And if we tell a child, use the force of your willpower to control how much time you’re spending, you’re pitting a child against the world’s greatest product designers.”

Chris Murphy is hopeful about the future of social media in despite the obstacles.

“None of this is out of our control. When we had dangerous vehicles on the road, we passed laws to make those vehicles less dangerous,” he said.

“We should make decisions to make [social media] a healthier experience that would make kids feel better about themselves and less alone.”

Social Media-The Ultimate Equalizer

Edward Anderson Edward Anderson on December 7, 2022

Social media is an internet-based platform that enables us to share our thoughts, information and ideas through virtual networks and communities. It is collective term we use for applications and websites that focus on interaction, communication, content-sharing, collaboration and community-based input. In our personal life, social media provides us with a platform where we can learn new things, develop our hobbies and interests, connect and communicate with our family and friends and most importantly, it provides us with a source of entertainment. Some of the most popular entertainment platforms are Facebook, Twitter, YouTube, Instagram, and Snapchat.

Similarly, social media has become a very important part of our everyday lives giving birth to social media influencers. A social media influencer is a person who has a loyal as well as a considerably huge social media following and they have a powerful influence over the wishes, wants and purchasing decisions of their fan base. One such social media influencer is Raginald Vicente Paz, who has a huge social media following and is popularly known as a dog dad, foodie, toy collector and self-proclaimed blogger. Paz is an American IT professional who has used the social media platform to facilitate and benefit others through his knowledge and expertise. Paz shares his everyday experiences with his followers, which is not only a source of valuable information but also proves to be a very good source of entertainment. Paz has a passion for traveling and food, and wants to explore different cuisines and cultures around the world. He regularly blogs about his food sampling and food experiments on his social media handles. He is also a toy collector and has a huge collection of Funko Pops, which includes figurines of Toy Story characters like Woody, Buzz Lightyear and his French bulldog. Paz has created a perfect work-life balance by managing his responsibilities effectively. Nowadays people use social media to create a false image of themselves, which sets out unrealistic expectations for others. But Paz wants to keep it real and regularly gives us an insight of his regular and imperfect life.

Social media is like a double-edged sword, and has its positive and negative impacts on the society. It completely depends on us how we use it. The negative effects of social media include cyberbullying, lack of quality family time, poor time management, and increased laziness. However, the positive impacts of social media outweigh its negative effects. Social media if used correctly, increases global connectivity, facilitates education, provides valuable information, improves mental health, and helps in building relationships and communities. It is also a very ideal and helpful tool to support different causes. Social media helps bring people of different backgrounds, beliefs and cultures from around the world together on a common platform. Thus, creating a sense of unity among people of diverse cultures. It’s a place for people to show their creative side through their artistic works. Whether it’s a poem, a song, a work of art or a decadent dessert, it can be shared on social media without any restrictions and in many cases can open the doors to several milestones and achievements. It helps us develop and enhance our abilities and knowledge. Social media, if used actively, assertively and mindfully, like Paz does, can be a very effective tool to voice our thoughts, ideas and opinions.

Sylvester Stallone provides Bruce Willis health update

Nicholas Alexander Nicholas Alexander on November 17, 2022

Sylvester Stallone made a name for himself in the 1970s and 1980s as one of the biggest names in action movies.

Along with Arnold Schwarzenegger, Stallone redefined the action genre to become what we see today.

However, Bruce Willis, his friend and co-star, announced his retirement this year, citing health problems.

Recently, Sylvester Stallone provided an update on Willis’ health.

Bruce Willis

In March 2022, Bruce Willis’ family announced his retirement after his diagnosis with aphasia, which affects speech recognition.

Aphasia can cause a loss of the ability to understand or express language.

At the time, Willis’ family and loved ones released a statement stating:

“To Bruce’s amazing supporters, as a family, we wanted to share that our beloved Bruce has been experiencing some health issues and has recently been diagnosed with aphasia, which is impacting his cognitive abilities.”

Read also: Nikita Dragun arrest details come to light

“As a result of this and with much consideration, Bruce is stepping away from the career that has meant so much to him.”

“This is a really challenging time for our family, and we are so appreciative of your continued love, compassion, and support.”

“We are moving through this as a strong family unit, and wanted to bring his fans in because we know how much he means to you, as you do to him.”

“As Bruce always says, ‘Live it up’ and together we plan to do just that.”

Stallone

Bruce Willis’ close friend Sylvester Stallone gave fans an update on his health.

However, it was not the kind of news they were hoping for.

In an interview with The Hollywood Reporter, Stallone shared:

“Bruce is going through some really, really difficult times. So he’s been sort of incommunicado. That kills me. It’s so sad.”

Read also: Stranger Things characters should have died

Expendables

When Bruce Willis’s diagnosis was announced in March, Sylvester Stallone wished his friend well online.

Stallone shared a photo of the two, writing:

“We go back a long way. Praying for the best for you and your wonderful family.”

The two already had a strong friendship over the years and finally appeared together in The Expendables franchise.

However, Willis was absent for the third film as his character, Mr. Church.

At the time, Sylvester Stallone took a dig at Willis and tweeted:

“Willis out … Harrison Ford in! Great news! Been waiting years for this.”

Although it looked like the two had a fallout, Stallone clarified the situation.

“It’s nothing personal,” he said. 

“It’s not like it got personal, and I’m sorry it did sound that way. But it was just actors talking, and things move on.”

“I think Bruce Willis is a great guy, and he does fantastically entertaining films.”

Reference:

Sylvester Stallone gives sad update on Bruce Willis’s condition

President Joe Biden wary of Elon Musk

Leah Cooper Leah Cooper on November 17, 2022

President Joe Biden recently noticed Elon Musk, CEO of Tesla and new owner of Twitter, has a unique relationship with other countries.

He also says Musk’s relationship is worth looking into.

However, Biden declined to specify how.

President Biden

At a Wednesday conference in the White House, the president shared his thoughts on Elon Musk as a threat to the United States.

Interviewers brought up the joint acquisition of Twitter by Musk and foreign governments.

“Elon Musk’s cooperation and/or technical relationships with other countries is worthy of being looked at,” said President Joe Biden.

“Whether or not he is doing anything inappropriate – I’m not suggesting that.”

“I’m suggesting it’s worth being looked at, and that’s all I’ll say.”

Read also: Hillary Clinton calls out Republicans on their hypocrisy

Elon Musk

Conversely, Elon Musk is not a fan of the US President.

The new Twitter owner actively criticizes Democrats on his social media accounts.

Throughout the year, Musk accused President Joe Biden of neglecting his electric vehicle company despite Tesla’s success.

Instead, Biden would prefer the old automakers and their union.

As a result, Elon Musk pledged to vote for the Republicans.

Read also: Itaewon police offices raided following Halloween crowd crush

National security reviews

Before Musk completed the $44 billion acquisition, Bloomberg reported that Biden administration officials discussed putting his operations to national security reviews.

According to CNN, the Biden administration dismissed the report, citing people familiar with the matter.

National Security Council spokeswoman Adrienne Watson said: ‘We do not know of any such discussions.’

According to a Treasury Department spokesperson, the Committee on Foreign Investment in the United States does not comment publicly on transactions it may or may not review under law and practice.

Additionally, several foreign companies and investors have pledged to help Musk fund the deal, including Qatar’s sovereign wealth fund and Prince Alwaleed bin Talal of Saudi Arabia.

Prince Alwaleed bin Talal was one of Twitter’s most prominent investors.

References:

President Biden says Elon Musk’s relationships with other countries are worth looking into

Elon Musk will take more action on Twitter

Nicholas Alexander Nicholas Alexander on November 10, 2022

Elon Musk buying Twitter continues to trend in the online world after the world’s richest man took over last week.

The Tesla CEO has already relieved several key company figures, and now he is looking to do the same with the current workforce.

The news

A memo sent to Twitter employees reveals that Elon Musk will fire employees on Friday morning.

The news follows several employees filing a collective class action lawsuit against him.

The employees argue that the layoffs violate labor laws.

Musk’s email arrived Thursday night to inform employees that they will be notified on Friday at noon.

The notification informs them of their employment status with the company.

Read also: Elon Musk to find new source of revenue for Twitter

The email

A copy of Musk’s email reads:

“If your employment is not impacted, you will receive a notification via your Twitter email.”

“If your employment is impacted, you will receive a notification with the next steps via your personal email.”

Musk’s email also states that the company’s office will temporarily close and suspend badge access on Friday.

The suspension is a security measure for the company’s systems and employees.

The memo follows news of Elon Musk’s plans to lay off more than half of the company’s staff after buying the social media company for $44 billion last week.

Lawsuit

Former Twitter employees filed the class action lawsuit on Thursday.

They allege the company violated the state Worker Adjustment and Retraining Act (WARN Act) after Musk fired several employees.

The WARN Act requires employers with more than 100 employees under their supervision to give 60 days’ written notice of mass layoffs.

Additionally, attorney Shannon Liss-Riordan, who filed the lawsuit, released a statement detailing the action.

“Elon Musk, the richest man in the world, has made clear that he believes complying with federal labor laws is ‘trivial,'” said Liss-Riordan.

“We have filed this federal complaint to ensure that Twitter be held accountable to our laws and to prevent Twitter employees from unknowingly signing away their rights.”

Additionally, Twitter has had around 7,500 employees after Musk bought the social media company.

Read also: General Motors will pull ads out of Twitter after Musk acquisition

Other notes

According to two people who understand the Twitter situation, Elon Musk began his company ownership by removing CEO Parag Agrawal and two other executives.

The company’s C-suite is nearly empty due to massive layoffs and resignations in less than a week.

Additionally, Musk disbanded Twitter’s board of directors.

Reference:

Employees sue Elon Musk’s Twitter after staff are informed that layoffs are set to begin

UK gives breakup order, Meta to comply and sell Giphy

Nicholas Alexander Nicholas Alexander on October 24, 2022

 

Facebook’s parent company Meta is expected to sell Giphy as the UK plans to force the tech giant to complete the service acquisition.

Giphy is an American online database that users use to find GIFs for comments, messages, chats, and text messages on social media.

The news

The announcement marks the first time regulators have stripped part of the tech giant since a global antitrust review probed the company’s dominance.

The decision was made on Tuesday.

The UK’s Competition and Markets Authority (CMA) decision sparked a long battle with Meta over the deal’s impact on competitors’ access to GIFs and the digital advertising market.

Meta went to court to defend the deal, but British officials prevailed over the summer.

The court upheld the CMA’s finding that the acquisition of Giphy could reduce competition by eliminating a competitor in online advertising.

The acquisition also limits third-party access to Giphy’s GIF library.

Meta response

Facebook’s parent company issued a statement on Tuesday confirming that it would accept the UK’s decision as “the final word on the matter.”

A meta spokesperson clarified the statement:

“We will work closely with the CMA on divesting GIPHY.”

“We are grateful to the GIPHY team during this uncertain time for their business, and wish them every success.”

While this resulted in a loss, Meta said it would continue to explore acquisitions.

Acquisitions

Over the years, critics have accused larger tech companies of seeking “killer acquisitions” from smaller companies.

Critics say the acquisitions could undermine the dominance of the biggest names, reducing potential competition in the industry.

In the United States, the “buy-or-bury” strategy is at the center of a federal lawsuit that forces Meta to split WhatsApp and Instagram.

The attempted Federal Trade Commission violation could lead to a trial in 2024.

Additionally, the FTC filed a lawsuit to block the social media giant’s acquisition of Within Unlimited, a virtual reality technology company.

They argued that the deal could give Meta more power to build a “virtual reality empire.”

Meta now faces both lawsuits.

References:

Meta says it will sell Giphy to comply with UK breakup order