Digital ad push: Yahoo to buy minority stake in Taboola, Marketing & Advertising News, ET BrandEquity

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by Samuel Pordengerg Nov 29, 2022 News
Digital ad push: Yahoo to buy minority stake in Taboola, Marketing & Advertising News, ET BrandEquity
<p>A Yahoo logo is pictured in front of a building in Rolle, Switzerland December 12, 2012. (File photo/Reuters)</p>
A Yahoo logo is pictured in front of a building in Rolle, Switzerland December 12, 2012. (File photo/Reuters)
Yahoo Inc will buy nearly 25% of Taboola.com Ltd and become its largest shareholder in a deal allowing the online advertising company to exhibit paid content on the web portal's many sites.

At a time when industry giants are struggling with an inflation-driven downturn in ad spending, Yahoo's 30-year contract is a big bet.

The Yahoo-Taboola partnership is expected to generate $1 billion in annual revenue, but the companies did not provide any other financial details. Yahoo will also get a seat on Taboola's board. Yahoo, owned by private equity firm Apollo Global Management since a $5 billion buyout last year, has over the years been overtaken by Google and Facebook, but it still has nearly 900 million monthly active users thanks to a collection of sites such as Yahoo Finance, Yahoo Sports and TechCrunch. Taboola, whose shares rose 60% on the news, pushes links to articles paid by advertisers - known as native advertising - on many websites such as CNBC and NBC News. The deal will hand Taboola exclusive rights to sell native ads on Yahoo's sites. The advertising firm said it expects the agreement to add to its revenue, operating earnings and free cash flow. In its latest earnings, Taboola posted a drop in quarterly revenue and also lowered its annual forecast because of a weak ad market. The deal, which has been approved by the companies' boards, is expected to close in the first quarter of 2023. Taboola plans to host a meeting on Dec. 30 to seek shareholders' approval. Taboola, which went public through an about $2.6 billion blank-check merger in 2021, has lost 75% of its market value this year, as of last close.

Yahoo has a new head of partnerships and investment. The new head of the strategy isSandra Lin. Kenneth has joined as head of the company.

The story was published on Nov 29, 2022.