Taboola and Outbrain merge to create ‘meaningful advertising competitor’ to Facebook and Google
Content marketing platforms Taboola and Outbrain are set to merge, with the companies saying their combined scale will help them be a more robust competitor to Facebook and Google, giving advertisers more meaningful choice.
Once the transaction is completed, the Outbrain brand will be no more, and Adam Singolda, the founder and CEO of Taboola, will become the leader of the combined entity.
New branding for the combined entity will reflect the merger of the two companies
Yaron Galai, co-founder and co-CEO of Outbrain, will remain with the business for 12 months to help with its transition.
Branding for the new entity is still being determined.
Both companies’ board of directors have approved the transaction, but it remains subject to customary closing conditions.
Under the terms of the agreement, Outbrain shareholders will receive shares representing 30% of the combined company, plus US$250m in cash.
The combined company will have over 2,000 employees across 23 offices, with over 20,000 clients from 50 countries,
Eldad Maniv, president and COO of Taboola, said both companies carried great talent, but the combined business had aggressive goals, and would be integrating the teams quickly.
“As soon as the merger closes, we will work to integrate teams, technology and infrastructure, so we can quickly accelerate growth across all dimensions,” he said. “We have set aggressive goals for bringing value to our customers, driving technology innovation and delivering financial results to our shareholders through increased efficacy and innovation. By working with David [Kostman, co-CEO of Outbrain], and the Outbrain team, I’m confident we can achieve them.”
Kostman added: “For over 10 years, each company has built incredibly powerful solutions that have helped tens of thousands of publishers and advertisers thrive. I look forward to working together with Eldad and his team to bring together the best of each company’s technology, product and business expertise to build a compelling global open web alternative to Google and Facebook.”
A press release promoting the merger cited statistics from eMarketer, which say just three companies – Google, Facebook and Amazon – control almost 70% of digital advertising revenue in the United States.
“We’re passionate about driving growth for our customers and supporting the open web, which we consider critical in a world where walled gardens are strong, and perhaps too strong,” Singolsda said. “Working together, we will continue investing to better connect advertising dollars with local and national news organisations, strengthening journalism over the next decade. This is why we’re merging. This is our mission.”
Galai said Outbrain and Taboola shared the same mission of supporting quality journalism globally and delivering meaningful value to the open web marketplace.
“Ori [Lahav, co-founder and chief technology officer of Outbrain] and I had a vision of helping people discover quality content online, and we see a tremendous opportunity in joining forces in order to bring the next wave of innovation to our publisher partners and advertisers,” he said.
“I’m confident that together, we’ll be able to further our mission, which we call our Lighthouse, of bringing the best, most trustworthy content discovery capabilities to users around the world.”
J.P. Morgan Securities acted as the financial adviser to Taboola, while Outbrain was represented by Goldman, Sachs and Co.
An inevitable development. Both companies offering ever bigger (guaranteed) revenues to publishers to gain market shares = ever-smaller margins for both, not to mention more and more dubious ads to try and prop up revenue. Likely outcome is lower revenues for publishers, but (hopefully) better quality ads. And, as with all mergers or acquisitons, expect to see some reasonably signficiant attrition/rationalisation of staff. Finally, although this is being officially described as a merger it is , of course, an aquisition of Outbrain by Taboola. Hence the new company will be called Taboola and be headed by the Taboola CEO.
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I think Benedict Evans put it best
Taboola bought Outbrain – these are the two companies that put piles of horrible ads at the bottom of web pages. This is like two STDs merging. But, they say they’ll do $2bn of gross revenue next year, which shows you how lucrative this stuff is and how hard it is for even reputable publishers to resist.
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