Yahoo Becomes Taboola's Largest Shareholder, Enters Exclusive 30-Year Commercial Agreement

Yahoo, an internet pioneer, and Taboola, a recommendations engine, have announced a 30-year exclusive partnership that will create what the companies call a “contextual data powerhouse,” which will be important as the advertising industry retires browser cookies.

The deal, announced Monday, gives Taboola the reins to exclusively power native advertising across all of Yahoo’s digital properties and will be available for advertisers to buy media through the Yahoo demand-side platform (DSP).

Taboola estimates that the deal, announced Monday, will drive around $1 billion in revenue for the company.

As part of the partnership, Yahoo will receive just under 25% of the pro forma equity of Taboola.

As part of the agreement, Yahoo -- which is owned by funds managed by affiliates of Apollo Global Management -- will join Taboola’s board and become the largest shareholder.

LionTree, a co-investor in Yahoo, served as a financial advisor to the transaction, among many others.

Under the terms, Taboola will power native advertising solutions on all of Yahoo’s internet properties, driving more than 800 billion impressions.

The collaboration also aims to help advertisers face the challenge of successfully targeting ads across a variety of operating systems such as Apple iOS14, as the advertising industry phases out third-party cookies as a method to collect data and target ads. 

“As part of the agreement, Yahoo will receive 24.99% of Taboola’s total issued and outstanding shares on a combined post-transaction basis, with approximately 60% in standard ordinary shares and 40% in new non-voting ordinary shares, as well as one representative on the Taboola Board of Directors,” the companies reported.

The agreement -- pre-approved by the board -- is expected to close in the first quarter of 2023, subject to receipt of customary shareholder and regulatory approvals, as well as certain closing conditions.

By powering Yahoo’s native advertising solutions, Taboola executives believe the company can 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.

Taboola will continue to invest heavily in research and development and strengthen its leadership in contextual advertising.

The deal spans across the open web, giving advertisers massive scale to reach customers.

Yahoo reaches nearly 900 million monthly active users worldwide across its properties such as Yahoo Finance, Yahoo News, Yahoo Sports, and others. Taboola, supports more than 9,000 publisher partners, reaching about 500 million active users daily.

With Yahoo and Taboola's large scale of users, the partnership will give advertisers access to a more sophisticated contextual dataset online. It will enable advertisers to target relevant audiences without relying on third-party cookies and while maintaining complete user privacy, the company said.

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