Yahoo and Taboola enter 30-year contract for native advertising

Yahoo takes 25% stake in Taboola in a commercial agreement aiming to generate $1bn in annual revenue.

The 30-year deal will see Taboola, the web advertising recommendations company, become search engine Yahoo’s exclusive native recommendations partner, developing offerings for advertisers, publishers and merchants. 

Yahoo is taking a 25% stake in Taboola, having been taken private last year after being sold by Verizon to Apollo Management Group in a $5bn deal in an attempt to boost the business. 

Yahoo and Taboola are aiming to create a “contextual data powerhouse” to help advertisers reach consumers at scale without being limited by walled gardens (such as the Facebook or Google ad ecosystems) as cookies become extinct.

Under the terms of the commercial agreement, Taboola will power native advertising solutions on all of Yahoo’s internet properties, driving more than 800 billion impressions, and will be available to buy through the Yahoo DSP.

As part of the agreement, Yahoo will receive a 24.99% share of Taboola, 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 as Single Largest Shareholder.

“The next era of Yahoo” 

The deal represents a strategic next step for Yahoo aiming to reinvigorate growth and innovation under new leadership since its CEO Jim Lanzone was snapped up from Tinder last year.

“Yahoo is an internet pioneer, representing one of the largest, most trusted and most sophisticated publishers in the world,” said Adam Singolda, Founder and CEO of Taboola. “Everywhere I look, I see a rocket ship growth opportunity for both of us – native, e-commerce, video, header bidding (display) and more. 

“For publishers in the open web, we’ll be able to invest more in driving revenue, engagement and audience growth moving forward, empowering performance, brand advertisers, merchants as well as agencies with an immense reach to users in a premium, trusted environment. This partnership is a big step toward achieving our goal of generating $1 billion in ex-TAC (excluding traffic acquisition costs) by 2025.”

“The partnership also allows Yahoo and Taboola to continue to differentiate in the market, improving user, advertiser and publisher experiences across properties, while benefiting from the long-term tailwinds in digital native advertising,” added Lanzone.  

“As we continue to build the next era of Yahoo, we are thrilled to have strong partners by our side.”

The partnership will allow Yahoo to further enhance its own unified advertiser offerings and consumer experiences across its owned media properties, and participate in significant shared value creation as Taboola’s largest single shareholder.

The agreement, which has been approved by the Boards of Directors of both companies, is expected to close in the first quarter of 2023, subject to receipt of customary shareholder and regulatory approvals.