‘Gifs are cringe’: how Giphy’s multimillion-dollar business

It is rare for a multimillion-dollar company to explicitly state that its business is dying because it is simply too uncool to live.

But that is the bold strategy that the gif search engine Giphy has adopted with the UK’s competition regulator, which is trying to block a $400m (£352m) takeover attempt by Facebook’s owner, Meta.

In a filing with the Competition and Markets Authority, Giphy argued that there was simply no company other than Meta that would buy it.

Its valuation is down by $200m from its peak in 2016 and, more importantly, its core offering shows signs of going out of fashion. “There are indications of an overall decline in gif use,” the company said in its filing, “due to a general waning of user and content partner interest in gifs.

“They have fallen out of fashion as a content form, with younger users in particular describing gifs as ‘for boomers’ and ‘cringe’.”

To underline the point, Giphy’s filing included links to several articles and tweets.

Someone last week told me GIFs are for boomers and I have felt self-conscious ever since

— Chris Brown (@almostcmb) July 14, 2022

The generational divide is real, says the internet culture writer Ryan Broderick. “Gifs feel extremely dated. They were never easy to make and didn’t work particularly well on mobile.

“So now they are basically the cringe reaction image your millennial boss uses in Slack. Rather than what they used to be, which was a decentralised image type for communicating on blogs and message boards. It’s actually kind of sad how choked out the gif was by large corporations, copyright laws, and mobile browsers.”

The animated gif is also comfortably millennial: invented in 1989, it pre-dates not only smartphones and social media but even the world wide web. It exploded in popularity alongside the rise of the web as the easiest way to add motion to a page but it slowly lost ground to other ways of showing pictures that required less of the limited bandwidth of the time.

Its revival came at the turn of the 2010s, alongside the growth of the social network Tumblr. Although gifs were never intended to be a replacement for video, faster internet connections meant they were again the easiest way to share short clips – too short to have meaning on their own but perfect for adding context and colour to posts in the form of the “reaction gif”.

I just learned how to use reaction gifs and the teenagers are now informing me that gifs are “cringe”

— Dan Robinson (@danrobinson) June 30, 2022

Popularised by Tumblr blogs such as What Should We Call Me, which curated a perfect selection of responses to any situation, reaction gifs quickly became synonymous with the format itself. Why reply to a post with “OMG”, when you can post a quick clip of Donald Glover from the sitcom Community walking into a burning room carrying a stack of pizzas?

At the peak of its cultural impact, making, posting and curating gifs could easily have become a full-time job. The best creators were known for the speed with which they could clip out shareable moments from TV shows or live events as they aired, as well as their ability to massage the format to keep the frame rate high and the file size low.

But while the most dedicated posters kept large archives of their most-used gifs, carefully sorted and labelled, for many, tracking down exactly the right one to use in any situation was a bore.

That was the problem Giphy sought to solve when it was founded in 2013. As a “search engine for gifs”, the company gathered more than 300,000 from across the web, tagged and categorised them, and helped users find exactly the right one for any given situation.

“Giphy was thought up over breakfast with my partner on the project, Alex Chung, while musing on the rise of purely visual communication,” the co-founder Jace Cooke said in a 2013 interview with the Daily Dot. “We both couldn’t get over how cumbersome it still was to find and share gifs, and thought we could do something about it.”

But democratising gifs also laid the seeds for their destruction. “Whether by design or intent, Giphy’s search tools led to a noticeable monotony in gif culture,” said Brian Feldman, an internet culture writer in 2020.

“The same principles that apply to Google also seem to apply to Giphy: if you’re not in the top three results, you might as well not exist. Reaction gifs became flattened and less diverse.”

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Technical changes compounded the problem. The same reasons why the gif died the first time round hadn’t gone away: the technology produces large files with poor image quality.

Even as sites such as Twitter and Facebook built in support for posting gifs, they also changed them, turning them into video files to more efficiently display them on mobile devices. That meant that users could not simply download a gif they saw and save it for later, which further flattened the selection available.

The top gifs of last year tell their own story. As Giphy grew as a business, to the point where its annual revenue is now estimated at $27.5m by analysts GrowJo, it also hit another problem: copyright.

The company’s response was to partner with media outlets to host original gifs, and today, nine of the top 10 gifs on the site in 2021 were posted there by the company that made them, in a cross-promotional push to encourage viral content.

The No 1 gif of 2021 was a slow zoom on the character Stanley from the US version of The Office – a clip of a 15-year-old episode of a show that was old even before Giphy was founded. The second place is a clip of Tom, of Tom and Jerry, falling asleep on a pillow; the third is from a contemporary source, a shot of from Bake Off looking shocked. Just one, a cartoon of a happy fat duck dancing, was created by someone other than a major media partner.

Giphy even lists “its ability to retain key content partners” as a core reason for the CMA to allow it to go ahead with the Meta acquisition, arguing that a less respected owner could jeopardise the relationships.

But the gif has also outgrown Giphy. Gif keyboards in apps such as WhatsApp and Twitter may not all use the service – competitors such as Tenor, which was acquired by Google for an undisclosed amount in 2018, also exist – but they all have the same effect: of making it easier for people to send the quick shareable clips to each other. And yes, that includes boomers.

Daphne Bridgerton laughing is the eighth most popular gif on Giphy. Photograph: Giphy/Netflix/https://giphy.com/stories/top-gifs-of-2021-a4b4dd4f-8e99

2021’s top gifs

1. Bored Stanley from the US Office

2. Tired Tom from Tom and Jerry

3. Shocked Liam from The Great British Bake Off

4. Sad Pikachu from Pokémon

5. Agatha Harkness winking from WandaVision

6. Peppa Pig saying “¡Feliz Cumple!” from the Spanish-language Peppa Pig.

7. The Weekend performing at the Super Bowl

8. Daphne Bridgerton laughing from Bridgerton

9. A happy dancing duck by animator Foodieg

10. Happy Baby Yoda from the Mandalorian