Yahoo takes 25% stake in Taboola as part of 30-year commercial agreement
Taboola will power native advertising exclusively across Yahoo in an agreement the companies estimate will generate approximately $1 billion in revenue annually
Yahoo and Taboola announced on Monday that they have entered into a 30-year commercial agreement which will see Yahoo receive just under 25 percent of the pro forma equity of Taboola, making it the company’s largest single shareholder. According to the agreement, the Israeli-founded digital advertising platform will exclusively power native advertising across all of Yahoo’s digital properties and will be available to buy through the Yahoo DSP.
Yahoo believes the deal will help it further enhance its own unified advertiser offerings, enhance consumer experiences across Yahoo’s owned media properties, and participate in significant shared value creation as.
Taboola went public last year via a SPAC merger at a $2.6 billion valuation, but as of Monday had a market cap of just $455 million.
Taboola will benefit from Yahoo’s scale as a leading consumer tech company reaching nearly 900 million monthly active users worldwide. By powering Yahoo’s native advertising solutions, Taboola will help deliver greater reach, better campaign performance, and improved user experiences, supporting brands as they continue to look for alternative advertising options outside of walled gardens.
“Yahoo is an internet pioneer, representing one of the largest, most trusted, and most sophisticated publishers in the world,” said Adam Singolda, Founder and CEO of Taboola. “Everywhere I look, I see a rocket ship growth opportunity for both of us - native, eCommerce, Video, header bidding (display), and more. This win-win partnership will meaningfully accelerate our growth flywheel, expanding our reach to more users on the open web with high-intent traffic to provide world-class solutions for advertisers, publishers, merchants, and users in a cookie-less world. For publishers in the open web, we’ll be able to invest even more in driving revenue, engagement, and audience growth moving forward, empowering performance, brand advertisers, merchants as well as agencies with an immense reach to users in a premium, trusted environment. This partnership is a big step toward achieving our goal of generating $1 billion in ex-TAC by 2025.”
In September, Singolda sent out a letter to the company’s employees announcing a significant cutback plan at the digital advertising company. The plan detailed that 6% of the workforce will leave the company, accounting for over 100 employees, with Taboola currently employing over 2,000 people.
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“Partnering with Taboola enables Yahoo to further enhance the contextual and native offerings within our unified advertising stack," said Jim Lanzone, CEO of Yahoo. "The partnership also allows Yahoo and Taboola to continue to differentiate in market, improving user, advertiser, and publisher experiences across properties, while benefiting from the long-term tailwinds in digital native advertising. Together with Taboola, we will maximize reach and campaign performance for advertisers, enhance monetization opportunities for publishers, and drive improved, privacy-forward experiences for users. As we continue to build the next era of Yahoo, we are thrilled to have strong partners by our side.”
Yahoo is owned by funds managed by affiliates of Apollo. The agreement, which has been approved by the Boards of Directors of both companies, is expected to close in the first quarter of 2023.
