Yahoo and Taboola ink 30-year ad deal at estimated $1B annual revenue
Yahoo has acquired a 25% stake in Taboola as part of a 30-year exclusive ad deal to support "millions of advertisers" that will struggle to be "successful" advertising on social networks over the coming years, Taboola CEO Adam Singolda said Monday.
Why it matters: The massive deal comes amid a rocky time for digital advertising. Taboola, in particular, has seen its stock drop more than 75% over the past year. The industry will only get more strained after the deprecation of third-party cookies.
Details: The deal allows Taboola to exclusively power Yahoo's native advertising business. Yahoo and Taboola will share ad revenue from these sales. The companies declined to disclose the split, per the New York Times.
- Taboola estimated the partnership will generate $1 billion annually, per the press release.
- Yahoo now will be Taboola's largest shareholder. A Yahoo representative will join Taboola's board.
- The companies said the deal is expected to close in the first quarter of next year, subject to regulatory approvals and Taboola's shareholder approval.
What the CEO is saying: On a Taboola investor call Monday morning, Singolda emphasized the scale and trust of the Yahoo brand and the first-party data that's crucial for advertisers.
- "There needs to be an internet we can trust ... a safe place for consumers to interact and advertisers to succeed," Singolda said. "We will bring to market the largest first-party contextually based advertising company."
- Singolda also noted the length of the deal, saying he's been joking that "we'll be taking day trips to Mars when this gets renewed."
- "This is a big win for us, for the open web, for the good guys. Yahoo is an internet hero," Singolda said. "Over the next 30 years, we believe this will be very lucrative to everyone we care about."
Catch up quick: Taboola went public via SPAC last year at a $2.6 billion valuation.
- Apollo Global Management acquired Yahoo from Verizon for $5 billion last year. In September, Yahoo bought The Factual, a company that uses algorithms to rate the credibility of news sources.
The bottom line: Digital ad giants of the web are partnering to strengthen against their competition, social media, in difficult times that will only get harder for the ad industry.