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Data: Taboola; Chart: Axios Visuals

Taboola, the content recommendation company known best for the chum box ads at the bottom of publishers' websites, has agreed to merge with special purpose acquisition company, ION Acquisition Corp., and become a publicly-traded company.

  • The deal values Taboola at $2.6 billion. Taboola's last round of funding in 2015 valued the company at an estimated $1 billion.

Catch up quick: Taboola CEO Adam Singolda founded the company in Israel 13 years ago to help publishers monetize their audiences on websites. Today, the company has roughly 1400 employees in 17 countries around the world and is looking to expand from websites to content recommendations anywhere on the open web.

  • Taboola almost merged with chum box rival Outbrain last year, but the deal fell apart following pandemic-related headwinds and concerns that the merger would prompt regulatory concerns.

By the numbers: The company raised approximately $545 million — $259 million in a trust from ION as well as $285 million in private investors.

  • Taboola expects to have $600 million of cash and cash equivalents on its balance sheet at closing, according to a statement.
  • Prior to the deal, Taboola raised $160 million and had approximately $240 million of cash and cash equivalents on its balance sheet as of December 31, 2020.
  • Taboola brought in roughly $1.2 billion in revenue in 2020, with about $375 million that actually went to Taboola, per a statement. (The company pays out most of its gross revenue to its publishing partners. It has no consumer revenue partners.)
  • Last year it had about $34 million of operating income, representing approximately 3% of revenues.

The big picture: Singolda tells Axios that he sees any sort of open web device, whether it being a smart refrigerator or a smart TV, one day being able to use Taboola's technology to power content recommendations.

  • Taboola’s recommendation platform today provides over 1 trillion recommendations a month to approximately 500 million daily active users. It works with more than 9,000 digital publishers, including premium publishers like CNBC and Business Insider, as well more than 13,000 advertisers, reaching 516 million daily active users.
  • The universe of potential recommendations and users would grow exponentially if Taboola's recommendation engine were used by more internet-connected devices on the open web. Singolda sees more opportunities for the publishing industry to expand as the world of internet-connected devices expands.

The big picture: Taboola is positioning this effort as an antidote to the growth of many internet giants that act as "walled gardens" by keeping their user data proprietary.

  • "Contextual signals are stronger on mobile web than social networks," Singolda tells Axios. He says the company's main competition is "anyone in business of offering software revenue tools to publishers," including CMS providers, email servers, etc.
  • Because the company works with publishers to serve content-based recommendations, most of the tech giants' newer efforts to phase out cookie-based ad targeting won't impact Taboola.

Be smart: While Taboola relies mostly on artificial intelligence to power content recommendations, Singolda says the company has invested in hiring over 50 full-time human moderation to ensure that every piece of content on its site is approved.

  • Once a trusted relationship is brokered between a publisher and Taboola, the company can move to relying more heavily on AI to monitor that company's content.

What's next: The transaction is expected to close in early Q2. The company will be listed on the NYSE under the ticker "TBLA."

Go deeper

Jan 27, 2021 - Technology

Facebook to downplay politics on its platform

Photo Illustration: Sarah Grillo/Axios

Facebook CEO Mark Zuckerberg on Wednesday said the company will dial back on pushing political groups and content to users.

Why it matters: Facebook is hoping to dim intense political pressure from conservatives and liberals by backing away from arguments it’s long made that political speech is vital to free expression.

Ina Fried, author of Login
Updated Jan 27, 2021 - Technology

Apple's quarterly sales top $100 billion for first time

Credit: Apple

Spurred by strong sales of the latest iPhones, Apple reported it took in a record $111 billion in revenue for the three months ended Dec. 31, as the company crushed expectations.

Why it matters: The move showed even a pandemic didn't dull demand for Apple's latest smartphones.

Texas abortion law remains in effect after appeals court ruling

Pro- and anti-abortion protesters outside the Supreme Court as arguments begin about the Texas abortion law on Capitol Hill in November. Photo: Jabin Botsford/The Washington Post via Getty Images

A U.S. appeals court transferred a challenge to Texas' law banning most abortions after about six weeks of pregnancy to the state supreme court in a 2-1 vote on Monday evening.

Why it matters: The 5th U.S. Circuit Court of Appeals' decision means the country's most restrictive abortion law can remain in place for the time being.