Taboola has announced a 30-year, long-term, strategic partnership with Yahoo.
Adam Singolda, Founder and CEO of Taboola, termed it, “by far our most strategic partnership agreement ever, and in my mind one of the most exciting partnerships in the history of the Internet.”
In a blogpost, Singolda said that Yahoo chose Taboola because of its “superior technology, greater monetisation and cultural fit.”
As part of this partnership, Taboola is going to power recommendations and native advertising across brands such as Yahoo News, Yahoo Finance, Yahoo Mail, Yahoo Sports, and all of Yahoo’s digital properties.
“The agreement is for 30 years of strategic partnership and friendship. We’re going to join hands and innovate together, bringing more power to Open Web users, levelling up the fight against the walled gardens,” the blogpost read.
“Thanks to this partnership, advertisers will get access to 3 things – massive scale, contextual powerhouse in times of privacy, and return on ad spend. We intend to invest heavily in advertising stack, bidding strategies/SmartBid, creative formats, and more,” it added.
Breaking down the deal, Singolda stated that Yahoo reaches nearly 900 million people a month, this is an unbelievable scale with unbelievable performance for advertisers. Taboola, across our 9,000+ publisher partners, reaches about 500 million active users a day. “For advertisers and merchants this means unprecedented reach on the Open Web.”
“But we’re not stopping there. The collaboration will also help the industry address the key challenges of effective targeting on the backdrop of iOS14 and the demise of 3rd party cookies. Our collaboration with Yahoo will give advertisers access to what I believe is the most sophisticated contextual dataset online. Together, we’re going to build a ‘Contextual Powerhouse’, enabling advertisers to target relevant audiences without relying on third-party cookies and while maintaining complete user privacy,” the blogpost read.
As part of this, Yahoo native advertisers will now buy Taboola exclusively, meaning that the latter’s publishers will get even more quality demand.
Speaking in monetary terms, the blogpost stated, “The new partnership with Yahoo is expected to add around $1 billion in annual revenue to Taboola once we’re fully ramped up. For illustration purposes, if Yahoo inventory was part of Taboola in 2022 we would have generated $2.5 billion in revenue, assuming it was fully ramped up and expected operating improvements were realised from day 1.”
“That’s before additional revenue opportunities from growth engines we have identified to work on over time – things like eCommerce, Video, Header Bidding (Display) and more. We expect to start rolling out in the second half of 2023 and continue into 2024 – so that’s when you should expect this to start materialising.”
“Earlier in the year, at our investor day, we shared our goal of generating $1 billion in annual ex-TAC by 2025, which given our financial profile implies about $300 million of Adjusted EBITDA and about $150M of Free Cash Flow. This partnership is a big step towards achieving that goal. It is transformative not only for Taboola and Yahoo, but also for every publisher and advertiser on the planet. Together, we’re going to offer an even bigger and better alternative to the walled gardens,” it stated.
Singolda also said that they will conduct a detailed information session after the deal closes, which they expect will be done in Q1 2023.