
GIF Site Giphy Is Valued at $600M - flinner
http://www.wsj.com/articles/gif-site-giphy-is-valued-at-600-million-1477906202?
======
TeMPOraL
Another iteration of the endless cycle of image hosting sites?

The cycle goes like this:

\- people want a bullshit-free service to upload images to, so that they can
link to them, and there's no option available

\- somebody starts such a simple, bullshit-free service

\- as time goes by, the service realizes hosting costs money and they can't
operate on a loss forever

\- they start adding bullshit to try and bring in some revenue

\- site turns into the same bloated crap it replaced

\- somebody starts a new bullshit-free site, and users migrate

For instance, imgur is at the last stage of this cycle now. If giphy is taking
serious investor money, it spells an accelerated period of crappifying the
service - investors need to get their return somehow.

~~~
randomdrake
I remember seeing the original post[1] when it was created. Exactly as you
say, there wasn't a good service to just host images.

 _" I got fed up with all the other image hosts out there so I made my own. It
doesn't force you to compress your images, and it has neat things like crop,
resize, rotate, and compression from 10-100. It's my gift to you. Let's not
see anymore imageshack/photobucket around here ;)

I'll be listening if anyone has some suggestions.

EDIT: The server was moved off of shared hosting after about 4 hours of
release. It's now on a dedicated server with a 100mb port."_

I often think about this post and imgur as an example of how an exceedingly
simple utility of the Internet can easily acquiesce, and succumb, to the
advertising and marketing forces that be[2].

[1] -
[https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_t...](https://www.reddit.com/r/reddit.com/comments/7zlyd/my_gift_to_reddit_i_created_an_image_hosting/)

[2] -
[https://www.youtube.com/watch?v=ubg0BQi57xE](https://www.youtube.com/watch?v=ubg0BQi57xE)

~~~
Iv
At one point we need to realize that there is a working model for that: public
infrastructure. Government-managed and funded.

~~~
drzaiusapelord
Like we had public access on cable? You had limited resources and serious
censorship both by the government and local 'community values.' Half the
things on imgur or gify wouldn't be allowed on this hypothetical government
hosting.

Having the government do everything has been tried in history and its leads to
failure (communism). There's a reason that the PC and internet and mobile
revolutions happened via capitalism and private business. Or why wikpedia is a
foundation or the wayback machine or whatever. I understand Bernie Sanders is
popular here and there's a strange 'have the government do everything, duh'
mentality popular with millennials now, but historically it doesn't pan out.
The government's role should be something that's carefully considered. Its not
remotely a fix-all.

~~~
mthoms
>Having the government do everything has been tried in history and its leads
to failure (communism).

Having the government do _some things_ has been tried in history and in many
cases has worked out quite well. The roads, schools and fire department are
quite good where I live for example. Though not perfect of course.

I'm not suggesting that _this particular service_ is a good thing for the
government to take on. Just want to mention that it's not "all-or-nothing"
choice.

------
tyre

      But Giphy faces challenges in building a business.
      It hasn’t figured out a way to bring in revenue, and it
      doesn’t own many of the GIFs or have exclusive distribution
      partnerships.
    

They have raised $150 million for a GIF search engine.

~~~
riffraff
..Which also works crappily. I am exposed to giphy through the slackbot
interface and it never finds anything relevant.

~~~
yolesaber
I really hate it when there's that one coworker that insists on /giphy-ing
everything in slack. Usually its a clueless manager who thinks cute little
pictures will inspire team morale, but all the results are always random and
oftentimes tone-deaf or, in some cases, straight up NSFW. It's very annoying,
thank god I can turn off gif display automatically.

~~~
kinkrtyavimoodh
Why can't it just be "someone who finds it cute / fun". Why does it always
have to be some cynical "MBA who thinks it will inspire team morale"

~~~
yolesaber
Because in my anecdotal experience it's always been the overeager manager. I
also qualified that statement with "usually", ergo it's not the absolute
"always" condition you specify in your unnecessary reply. Either way I find it
mad annoying. Emoji reactions are perfectly fine and non-intrusive ways of
non-verbally communicating in a slack or IRC environment. GIFs suck. They are
possibly one of the worst image formats out there.

~~~
dev360
> GIFs suck. They are possibly one of the worst image formats out there.

Halo effect?

------
aakilfernandes
Related: The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech
Companies

[https://www.bloomberg.com/news/articles/2015-03-17/the-
fuzzy...](https://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-insane-
math-that-s-creating-so-many-billion-dollar-tech-companies)

~~~
overcast
Insane is accurate.

------
trymas
Probably I would look like a noob in the context of SV startup world, but can
someone tell me how these insane evaluations are calculated?

Or there is a deal on the way with google/facebook/whatever for their user/gif
database and/or search engine? Maybe they have some insane R&D going on that I
am not aware of?

When I see startups without any proper business model on how to make money
evaluated for insane prices ..ahem twtr ahem.. and burning mountain loads of
money - it makes my blood boil.

~~~
summarite
Snapchat with higher valuation than Deutsche Bank. Tells you a lot about two
different industries at once - but if i had to invest in one i know I'd always
choose the latter over the former.

~~~
pavlov
That's what most people would have said about investing in Facebook vs. Lehman
Brothers in 2007...

~~~
dplgk
You retrospectively picked the winner (Facebook) of a bunch of companies in
the same race. How would you have picked Facebook in 2007? e.g.

MySpace vs. Lehman Brothers

Bebo vs. Lehman Brothers

Friendster vs. Lehman Brothers etc

------
overcast
Worth $600,000,000 - "hasn't figured out a way to bring in revenue". Got it.

~~~
JoelBennett
I'm always baffled by this as well. "Let's make something cool, get money from
investors, then figure out how to make money off it!"

In other words, cash in and leave before people find out there actually isn't
money in it or cram the service full of advertising and watch the users flock
to the next upcoming thing as your service tanks like a flaming dumpster
rolling down a San Francisco hill.

~~~
sumedh
Wasn't that Google's business model, they got funding before they figured out
how to make money.

------
bigdubs
I wanted to see how hard it would be to build a gif search engine, I made
[https://gifffy.com](https://gifffy.com) in a month. My buddies and I used it
for our personal slack instead of giphy. It is nice to be able to adjust the
search results ourselves.

I am pessimistic on gif search as a business. I am one (not super) talented
developer and I made a replacement in a month.

~~~
yolesaber
Do you have a blogpost or other info about how you made it? Did you just
scrape tumblr, twitter etc and associate the metadata tags with the images? Or
did you do any machine learning classification? Either way, you should apply
for seed funding. There's clearly a market for gif searching...apparently.

~~~
bigdubs
I am an avid reader of `/r/reactiongifs` and `/r/highqualitygifs`.

Classification is done by hand, and the idea anyway is to use feedback (either
slack reactions or voting on the site) to figure out what the best tag for an
image is.

ML classification is pretty tough when it comes to dank may-mays.

~~~
yolesaber
Classification is done by hand? So you find a gif you like and then add it to
your db and do all the tagging and metadata yourself? Interesting. I feel like
a script that scrapes Tumblr for gif posts and their associated tags would be
a good approach to start automating things.

~~~
bigdubs
I've found that quality >> quantity, and specifically tumblr is a horrible
place to find gifs (bad quality, weird contexts or usage for the gifs).

~~~
yolesaber
Fair enough. I'm inclined to believe that's how GIFy does it, because a lot of
their gifs have the stuttering, sliced up kind of motion and compression so
endemic to tumblr gifs

------
kelvin0
From the article: “We believe GIFs are emerging as a format that consumers
love and will be really important to advertisers as well,” said Barry Schuler,
a partner at Draper Fisher Jurvetson.

OK, for me GIFs are from a bygone era of the web, for example:
[http://www.11points.com/Web-
Tech/11_Best_Old_School_Animated...](http://www.11points.com/Web-
Tech/11_Best_Old_School_Animated_GIFs)

This is similar to bell bottom jeans coming into fashion again, and then
having a retail store advertise them as an 'Emerging fashion trend' (more like
recycling fashion trend)

~~~
angus-prune
I entirely get what you're saying, but GIF doesn't mean GIF anymore. Many
sites and applications are silently presenting MP4 or webm instead of actual
gifs, often with the file format gifv.

"gif" has stopped meaning a .gif and now just means a short, looping, animated
video.

File it alongside "disk" (solid state disk, save to disk etc), film (to mean
movie) and various other weird language evolutions. These things used to grate
on me, but then I chose to embrace the cultural history embedded in our
language.

I look forward to the year 2060 Buzfeed - "Top 37 words that used to mean
something else", "You'll never guess why we call videos 'gifs'" etc etc ;)

~~~
cyborgx7
gifv isn't a file format, just an extension for an html document

~~~
angus-prune
I meant file extension. My bad.

------
grosbisou
I wonder if I am once again too negative. But what the hell?

Valuation doesn't mean anything I know. But how can they raise so much money
on a product like this? What's the monetization available behind this apart
from selling user data.

~~~
ErikVandeWater
I think you're right.

Selling user data itself is not nearly as valuable for Giphy as for other
sites. No one stays on Giphy for long, or shares anything interesting about
themselves apart from what Giphy can get from cookies. They say 100 million
people see Giphy gifs a day, so probably about 10 million actually "use"
Giphy. Even with FB's $13.74 valuation per user with better analytics and a
validated business model, that only comes to $137M.

On a completely unrelated note: "Giphy, which is pronounced with a hard
'g'..." Thank god they know how to pronounce it unlike these (what I suppose
could be called) "people" who pronounce it with a soft g. ;)

~~~
detaro
so-called "people" like the creator of the format? ;)

[http://www.bbc.com/news/technology-22620473](http://www.bbc.com/news/technology-22620473)

~~~
bhandziuk
We've heard his opinion and ignored it. Mr. Wilhite can either come around or
we'll appoint a new inventor of the gif.

------
slezakattack
I think what makes Giphy so popular is its integrations with Slack and
Facebook. However, the Giphy Slack integration is really awful. Should be
renamed to gif roulette or something. RightGIF Slack integration is a _lot_
more accurate. I'm not sure what they are doing differently but the $600MM
valuation for a below average search engine is understandably off-putting..

------
fnbr
That's insane. Gfycat [1] is based in my hometown (Edmonton, Alberta), and I
always thought it was a dumb idea with no potential for monetization. Looks
like I'm wrong.

[1]: [https://gfycat.com/](https://gfycat.com/)

~~~
cloudjacker
> potential for monetization

the irony here is thats all they have

but thats enough to pivot to the business of equity sales

------
ionwake
I am confused as to how they could afford the bandwidth, atleast at the start,
to host the animated gifs

~~~
rileymat2
I am not sure it would cost all that much with a CDN like cloudflare.

~~~
Artemis2
Cloudflare will not be happy if use them for image hosting:
[https://news.ycombinator.com/item?id=12825719](https://news.ycombinator.com/item?id=12825719)

~~~
detaro
If you overdo it, but for starting out it works.

Giphy was founded in 2013 and raised several million in early 2014, at which
point they probably could afford paying a CDN or for their own infrastructure.

------
jgalt212
> raised a fresh $72 million round of equity funding from lead investor Draper
> Fisher Jurvetson, as well as Institutional Venture Partners and China Media
> Capital

These people all need to have their heads examined.

------
zelias
Would just like to point out that the article takes a hard stance on one of
the most hotly debated internet topics out there:

 _Giphy, which is pronounced with a hard “g”..._

~~~
tdb7893
At least in my social circles the hard g has won. Unless they rename it
Giraffe Interchange Format I'm sticking with the hard g.

~~~
generj
I'm the guy who has continued fighting the good fight even though the rest of
my social circle have decided on a hard g.

------
Tiktaalik
Giphy search almost never yields relevant and funny results and I really wish
my coworkers would stop using the Slack integration.

------
qwrusz
I realize valuation numbers like this make headlines and are a quick way to
proxy success (or lack of) for a startup.

But private market startup valuations are about as useful as public market
stock prices, i.e. not useful without more context and information.

Even if numbers are technically accurate no journalist would ever write
'Apple's stock price 3 years ago was around $700 vs closer to $100 today...so
the company must be hurting.'

I'm surprised startup valuations reporting has continued for so long without
more disclaimers or information in the articles about what a number really
means.

(side note: I'm also surprised movie weekend box office earnings are as big an
interest as they seem, so what the heck do I know).

If people are going to leak valuation numbers, is it right to publish this #
without knowing or asking a bit more what term sheets look like?

For those who might know, how hard would it be to get more accurate info
tracking the common equity value for startups?

------
merrickread
The bane of all work slack channels

------
neom
$600M isn't a crazy price tag for a media property that wanted all the content
and the brand. Plus, giphy has built some pretty deep integrations, I don't
expect apple or slack etc will all of a sudden start a giphy competitor. If
companies like Snapchat who already use sponsored content from brands are told
by those brands to pull that content from the giphy api because they are using
the base content on other platforms for the same campaign, seems like it could
become a viable business __(I retract "become a viable business" and replace
it with "have an outcome")

~~~
GrinningFool
But what's the value of their integrations? Sure they exist, but at best they
provide a convenient means of inserting entertainment into typically business
related chat - with no further stats gathered on who views via integration,
etc.

~~~
neom
The value of the integration is the promise of becoming a distribution
platform. From there you can figure out services and tools that folks will pay
for because it's easier/best to distribute your animated content through the
giphy platform to the partners, and, you have the ability provide insights and
analysis on what channels are working well, etc (snapchat like this type of
content, slack likes this, iMessage likes this/////) - I'm not saying that's
easy, or even possible. Simply if I was the CEO of giphy, that's what I'd try
to do with the funds. If I did a good job, I presume given a year or two of
building out and getting more deeply integrated, I could sell the technology,
team and partnerships to a bigger company for $500-$600MM.

~~~
GrinningFool
Fair point. That sounds like a viable path to acquisition - though I suspect
the odds are stacked against it as a path to profitability.

~~~
neom
I agree. Therefore "viable business" isn't how I should have phrased it.

------
zodPod
What? Why?! I only ever see the giphy URL I didn't even realize there was a
website to it I just thought it was a host like aws or something. Who are the
idiots who do these valuations?

------
dredmorbius
GIF site Giphy has, along with numerous other of its kin, found its way to my
firewall's /etc/hosts blocklist on account of the overuse and abuse of
autoplay images on far too many websites.

Until such time as browsers and animation-hosting sites refrain from autoplay
defaults, and worse: failure to provide any mechanism for overriding this at
the device, user, or application level, that shall be my SOP.

------
bluthru
20 times more valuable than The Wirecutter?

~~~
ksherlock
You know that Schrödinger guy? The one with the cat box? Well, he had a second
box. What's in it? Nobody knows! But as long as you don't open it, it could be
anything (dutch tulip bulbs, $1 billion flooz, rare beanie babies... the mind
simply reels!)

Wirecutter opened up their box and there was revenue and a business plan
inside. That's nice I guess but now their box is worthless.

~~~
blunte
I think that's the problem - so many startup investors are people who
accidentally got rich off some impossible or meaningless event that they think
magic|luck|mystery is what makes more money.

At least with Beanie Babies, you knew exactly what you were getting. A Beanie
Baby couldn't pivot.

------
yummybear
I can't imagine what it would be like trying to explain this stuff to someone
from the '40s.

~~~
ploika
Frivolity is nothing new. They'd get it as much as we do.

------
kylelibra
1B gifs served per day and 100 DAU.

Anyone have a guess at a business model to monetize on that sort of traffic?

~~~
msfeldstein
1 idea, Advertisers can pay to have their branded content be one of the first
suggestions in a GIF search

------
EugeneOZ
-1 for posting article behind paywall.

------
baybal2
who will give me 600m for lolgifs? I have few stacks of floppies full of them

------
angry-hacker
Besides the value, how these companies avoid copyright problems? It's
literally pirate bay but they host themselves.

------
beedogs
> “We believe GIFs are emerging as a format that consumers love and will be
> really important to advertisers as well,” said Barry Schuler, a partner at
> Draper Fisher Jurvetson.

Do these clowns really believe the shit that comes out of their mouths? Giphy
will never make anyone a dime; gotta wonder how they duped people into another
seed round.

------
zump
Who owns the intellectual property though?

------
arkitaip
I LOVE Giphy! It's the only reaction/gif site that made me think, "They should
_really_ have their own chat app". I would download that app in an instant.

~~~
hbosch
They have a keyboard app which is probably the better call.

