After merger with Taboola gets nixed, Outbrain CEO says it was like mixing oil and water

"We worked hard to mix water and oil, but ultimately the companies proved to be too different,” wrote Outbrain co-founder and CEO Yaron Galai on Thursday in a blog post explaining his side of the break-up with Taboola. The two companies were supposed to join forces in a much-touted merger of Israeli content distribution companies, which was supposed to result in one mega-company, but the deal fell through this week.

Galai’s post was published after Taboola CEO Adam Singolda got his side of the story out in a blog post explaining that the deal fell apart for financial reasons and that his board no longer saw value in it.

For Galai it was more complicated than that.

"We believed when entering this deal that there is great potential value to be had for our employees, our marketers and publisher partners, and our shareholders. However, this combination apparently was simply not meant to be,” he wrote.

Galai declined to address the financial details of the deal and instead focused on the differences in the nature, attitudes and strategies of the two companies.

"The details of the deal and its anticipated ending are confidential, and so I will not touch any of those. Instead, I want to focus on what comes next for Outbrain," Galai wrote.

"We founded Outbrain 14 years ago and invented the space we’re now most known for, with a value that has been core to us since we started: being the most trustworthy partner for the world’s best publishers, and for their readers.

"Outbrain was the first company in the space to create comprehensive, public ad guidelines, defining what we accept, and which of the budgets submitted to us – to reject,” he wrote adding that it was “shocking that in 2020 there are still companies, large and small, that are unsure whether they should reject fake news or other potentially harmful ads and content.”

Galai said that these issues came to the forefront during the Covid-19 outbreak, which saw a wave of misinformation hit the airwaves. He wrote about a letter he sent to Outbrain employees in March in which he laid out the company’s policies.

“It’s important that we all remember that all of our publisher partners and advertisers are entering this tsunami at the same time, and many of them are fearful for their businesses and their jobs. This is our opportunity to shine as partners! Let’s be there for them in their times of challenge, and let’s creatively think how to help them out of their tsunamis.

"Sometimes that might mean compromising on some short term benefits that we would, in normal times, insist on. If we are able to shine for our publisher partners and advertisers, and help them out at moments of distress with creative solutions – I’m confident that this will make us a stronger business and partner in the long run,” he told the team.

Galai did touch a bit on the company’s financials in the Thursday post.

"We didn’t use Covid-19 as an excuse to withhold payments or unilaterally change commitments; instead, we went out of our way to allocate more resources for our partners while they were facing existential challenges,” he wrote. “We’re very excited about Outbrain’s performance this year. After a few challenging months when Covid-19 started, Outbrain is profitable, hitting all of its key metrics, and experiencing strong year-over-year growth.”

Galai stressed, however, that the way they do business is no less important than its growth.

"Outbrain’s profits are achieved in alignment with our publisher partners while standing by all of our commitments to them. I’m extremely proud as an Outbrainer, not just for the profits we make, but also for ‘how’ we make them. We split our revenues equitably with publishers so that while we can make a sustainable profit – they can sustain their business, and hopefully make a decent profit themselves as well.

"During a very stormy year for the Outbrain team, due to both the pandemic and the cloud of the merger, Outbrain’s character as the number 1 most trusted partner for the world’s best publishers has shone through very brightly. We’re excited to continue innovating and building the best native advertising products for publishers and marketers as an independent company for many years to come." he concluded.