Content publisher Yahoo announced today it is buying nearly 25% of content recommender Taboola as part of a 30-year exclusive advertising agreement.
What Taboola gets. Taboola — which The Wall Street Journal refers to as a “clickbait giant” — will be the only source of native advertising for all of Yahoo’s digital properties for the next three decades. The two companies will share revenue from those ad sales, which they said will generate at least $1 billion in revenue annually.
What Yahoo gets. In return, Yahoo is taking 24.99% of Taboola’s outstanding shares and installing a representative on its board of directors. This will also let Yahoo use Taboola’s technology to manage its sizable business in native advertising.
Yahoo, which was taken private in a $5 billion deal last year, says it reaches nearly 900 million monthly active users via properties which include AOL, TechCrunch and Yahoo Sports. Taboola, which went public this year, says it partners with 9,000 publishers and reaches 500 million users every day. The company’s stock price, which was down 61% prior to today’s announcement, was up 55% in mid-day trading.
Why we care. Digital advertising will rebound from its current slump. No other channel has its reach or targeting capabilities. Yahoo CEO Jim Lanzone knows that and is positioning the company for it. The 30-year exclusivity may mean nothing, but got everyone’s attention as it was designed to.
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