The cost, which Facebook and Giphy declined to reveal, was placed by news website Axios at around $400 million.
The announcement comes at a time when regulators are under scrutiny over antitrust concerns for the largest social media network. According to news site TechCrunch, Giphy rebuffed a Facebook offer in 2015, choosing instead to continue integrating its products with multiple social media platforms.
Both companies have declined to comment on any previous discussions.
Giphy will become part of Instagram, the Facebook-owned photo-sharing site. Its GIF library will be further integrated into Instagram and other Facebook-owned apps, the companies said.
"People will still be able to upload GIFs; developers and API partners will continue to have equal access to GIPHY's APIs; and the creative community of GIPHY will still be able to create great content," Vishal Shah, product vice president of Instagram, said in the blog post.
"We will continue to make GIPHY openly available to the broader ecosystem," Giphy said in a Medium blog post.
A Washington-based antitrust advocacy group, the American Economic Liberties Project has urged regulators to investigate and block the acquisition.
"The Facebook-Giphy merger is just the latest example of the Federal Trade Commission standing by while Facebook and Google centralise control of online communications," Executive Director of Economic Liberties Sarah Miller said.
In 2018, Alphabet Inc.'s Google acquired Tenor's GIF platform and integrated it into its image search function, which Miller said has undermined Giphy's competitive market.
"Facebook is here now to pick up the wreckage, and to become even stronger," she said.
A spokesman for Facebook said Giphy 's current integration with social platforms like Twitter, Snapchat and TikTok by ByteDance wouldn't change.
The spokesman also said GIFs do not have mechanisms for online tracking such as pixels or cookies, a concern for privacy advocates wary of Facebook's aggressive collection of personal data for use in targeted advertising.
The Federal Trade Commission did not respond immediately to a request for comment.
Facebook's blog post said 50% of Giphy 's traffic is already coming from apps from Facebook, with half of that coming from Instagram.
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