Yahoo and Taboola (NASDAQ: TBLA), a global leader in powering
recommendations for the open web, today announced that they have
entered into a 30-year, exclusive commercial agreement. Taboola
will exclusively power native advertising across all of Yahoo’s
digital properties and will be available to buy through the Yahoo
DSP, establishing Taboola as a leading native advertising offering
for advertisers, publishers and merchants on the open web.
Through this unique partnership, Taboola will benefit from
Yahoo’s scale as a leading consumer tech company reaching nearly
900 million monthly active users worldwide as a top-ranked internet
property across mail, sports, finance and news. By powering Yahoo’s
native advertising solutions, Taboola will 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 R&D, enhancing how people
discover things they may like, and strengthen its leadership in
contextual advertising. As part of the partnership, Yahoo will
receive just under 25 percent of the pro forma equity of Taboola.
The partnership will allow Yahoo to further enhance its own unified
advertiser offerings, enhance consumer experiences across Yahoo’s
owned media properties, and participate in significant shared value
creation as Taboola’s largest single shareholder.
“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,
eCommerce, Video, header bidding (display) and more. This win-win
partnership will meaningfully accelerate our growth flywheel,
expanding our reach to more users on the open web with high-intent
traffic to provide world-class solutions for advertisers,
publishers, merchants and users in a cookie-less world. For
publishers in the open web, we’ll be able to invest even 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* by 2025.”
“Partnering with Taboola enables Yahoo to further enhance the
contextual and native offerings within our unified advertising
stack," said Jim Lanzone, CEO of Yahoo. "The partnership also
allows Yahoo and Taboola to continue to differentiate in market,
improving user, advertiser and publisher experiences across
properties, while benefiting from the long-term tailwinds in
digital native advertising. Together with Taboola, we will maximize
reach and campaign performance for advertisers, enhance
monetization opportunities for publishers, and drive improved,
privacy-forward experiences for users. As we continue to build the
next era of Yahoo, we are thrilled to have strong partners by our
side.”
Yahoo is owned by funds managed by affiliates of Apollo.
With long-term support from Apollo, alignment with shareholders
and commitment to support the advertiser platforms of both
companies, the partnership will accelerate both Taboola and Yahoo’s
growth plans in an attractive sector of the market. The agreement
represents a strong belief by Apollo in Taboola’s go-forward
strategy and future as a leading offering for advertisers,
publishers and merchants on the open web.
Commercial Agreement Details
Under the terms of the 30-year, exclusive commercial agreement,
Taboola will power native advertising solutions on all of Yahoo’s
internet properties, driving more than 800 billion impressions. 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 agreement is expected to be highly accretive to Taboola
Revenue, Adjusted EBITDA and Free Cash Flow. The agreement is also
expected to be highly accretive to Revenue and Adjusted EBITDA on a
per-share basis.
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, as well as certain closing conditions.
Separately, Taboola today announced a Special General Meeting of
Shareholders to be held on December 30, 2022, for the purpose of
seeking the required shareholder approval.
Accompanying materials on the agreement for Taboola investors
have been furnished to the SEC and posted on Taboola’ website at
investors.taboola.com.
Advisors
LionTree, which is a co-investor in Yahoo, served as financial
advisor to the transaction. Evercore served as advisor to Yahoo.
LUMA Partners also served as an advisor. Paul, Weiss, Rifkind,
Wharton & Garrison LLP and Erdinast, Ben Nathan, Toledano &
Co. served as legal counsel to Yahoo. Davis Polk & Wardwell LLP
and Meitar Law Offices served as legal counsel to
Taboola.
Conference Call
Taboola's management team will discuss the company's strategic
partnerships today, November 28, at 8:30 a.m. ET. The call can be
accessed via webcast at investors.taboola.com. To access the call
by phone, please go to this link to register
https://register.vevent.com/register/BI6269633748334152b7886199348941e7.
The webcast will be available for replay for one year, through the
close of business on November 28, 2023.
Upcoming Conference Participation
Taboola’s management team will present at the Credit Suisse 26th
Annual Technology Conference on November 30, 2022, at 3:45 p.m. MT
(5:45 p.m. ET) and host investor one-on-one meetings.
For more information, please visit the conference website at
https://www.credit-suisse.com/microsites/americas/annual-technology-conference/en.html
Investor Event
Taboola will hold an Investor Event following the closing of the
agreement, expected in the first quarter of 2023, to share
additional information on the agreement and provide updates on its
strategy, market opportunities and financial model. A webcast of
the event, along with supporting materials, will be accessible live
through the Investor Relations section of Taboola’s website at
investors.taboola.com.
About Taboola
Taboola powers recommendations for the open web, helping people
discover things they may like.
The Company’s platform, powered by artificial intelligence, is
used by digital properties, including websites, devices and mobile
apps, to drive monetization and user engagement. Taboola has
long-term partnerships with some of the top digital properties in
the world, including CNBC, BBC, NBC News, Business Insider, The
Independent and El Mundo.
Prior to today’s transaction, more than 15,000 advertisers used
Taboola to reach over 500 million daily active users in a
brand-safe environment. Following the acquisition of Connexity in
2021, Taboola is a leader in powering e-commerce recommendations,
driving more than 1 million monthly transactions each month.
Leading brands, including Walmart, Macy’s, Wayfair, Skechers and
eBay are among key customers.
Learn more at www.taboola.com and follow @taboola on
Twitter.
About Yahoo
Yahoo reaches nearly 900 million people around the world,
bringing them closer to mail, finance, sports, and news—with
the trusted products, content and tech that fuel their day. For
partners, Yahoo provides a full-stack platform for businesses to
amplify growth and drive more meaningful connections across
advertising, search and media. To learn more, please visit
yahooinc.com.
Note Regarding Forward-Looking Statements
Certain statements in this press release are forward-looking
statements. Forward-looking statements generally relate to future
events, including Taboola.com Ltd.’s (the “Company’s”) expectations
for the proposed transactions described in this press release and
future financial or operating performance of the Company.
In some cases, you can identify forward-looking statements by
terminology such as “may”, “should”, “expect”, “intend”, “will”,
“estimate”, “anticipate”, “believe”, “predict”, “potential” or
“continue”, or the negatives of these terms or variations of them
or similar terminology. Such forward-looking statements are subject
to risks, uncertainties, and other factors which could cause actual
results to differ materially from those expressed or implied by
such forward looking statements. Examples of such forward-looking
statements include, but are not limited to, projections or
estimates regarding the impact of the proposed transactions on the
Company’s future financial or operating performance.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by the Company and
its management, are inherently uncertain. Uncertainties and risk
factors that could affect the Company’s future performance and
cause results to differ from the forward-looking statements in this
press release include, but are not limited to: the Company’s
ability to obtain the required approvals to consummate the
transaction and the timing, costs or other actions that may be
required to obtain such approvals; the Company’s ability to
transition to and fully launch the native advertising service for
College Top Holdings, Inc., a Delaware corporation, and Yahoo
AdTech JV, LLC, a Delaware limited liability company (the “Yahoo
Parties”) on the currently anticipated schedule or at all; market
acceptance of the new service and the Company’s ability to attract
new or existing Yahoo advertisers to the new service; risks that
existing Yahoo advertisers may terminate their contracts as a
result of the proposed transactions and not migrate to the
Company’s service; the ability to generate $1 billion in annual
revenue from the transaction, which depends on, among other things,
full ramp up of the partnership, improved yields for Yahoo due to
the application of Taboola technology and data, improved yields for
Taboola due to increased advertiser demand from Yahoo and
additional data, and normal economic conditions; costs related to
the introduction and operation of the new service; the timing and
amount of any margin, profitability, cash flow or other financial
contributions of the new service; the risk that the new service
results in a decline in the Company’s financial performance during
the preparation and roll out of the new service and beyond; the
30-year term as an exclusive native publisher partner with the
Yahoo Parties, which can be subject to early termination in
accordance with the governing agreements and/or applicable law;
ability to generate or achieve the increase in revenue and ex-TAC
to the levels assumed in this press release or at all; ability to
transform the Company into an alternative to the walled gardens in
the open web; ability to expand beyond traditional advertising to
include additional value-added services to create future growth;
ability to accelerate the Company and Yahoo Parties growth plans;
ability to develop a leading offering for advertisers, publishers
and merchants on the open web; ability to maximize reach and
campaign performance for advertisers, enhance monetization
opportunities for publishers, and drive improved, privacy-forward
experiences for users; the intense competition in the digital
advertising space, including with competitors who have
significantly more resources; ability to grow and scale the
Company’s ad and content platform through new relationships with
advertisers; ability to maintain relationships with current
advertiser partners; ability to make continued investments in the
Company’s AI-powered technology platform; the need to attract,
train and retain highly-skilled technical workforce to support the
proposed transactions; changes in the regulation of, or market
practice with respect to, “third party cookies” and its impact on
digital advertising; continued engagement by users who interact
with the Company’s platform on various digital properties; the
impact of the COVID-19 or other possible future pandemics; changes
in laws and regulations related to privacy, data protection,
advertising regulation, competition and other areas related to
digital advertising; ability to enforce, protect and maintain
intellectual property rights; and risks related to the fact that
the Company is incorporated in Israel and governed by Israeli law;
and other risks and uncertainties set forth in the Company’s Annual
Report on Form 20-F for the year ended December 31, 2021 under Item
3.D. “Information About the Company - Risk Factors” and in the
Company’s subsequent filings with the Securities and Exchange
Commission.
Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on these forward-looking
statements, which speak only as of the date they were made. The
Company undertakes no duty to update these forward-looking
statements except as may be required by law.
*Non-GAAP Information
This press release includes ex-TAC Gross Profit, referred to as
ex-TAC in this press release, which is a non-GAAP financial
measure. This non-GAAP financial measure is not a measure of
financial performance in accordance with GAAP and may exclude items
that are significant in understanding and assessing Taboola’s
financial results. Therefore, ex-TAC Gross Profit, which Taboola
calculates as gross profit adjusted to include other cost of
revenues, should not be considered in isolation or as an
alternative to gross profit under GAAP. You should be aware that
Taboola’s presentation of ex-TAC Gross Profit may not be comparable
to similarly-titled measures used by other companies.
Taboola believes that ex-TAC Gross Profit is useful because
traffic acquisition cost, or TAC, is what Taboola must pay digital
properties to obtain the right to place advertising on their
websites, and Taboola believes that focusing on ex-TAC Gross Profit
better reflects the profitability of its business. Taboola uses
ex-TAC Gross Profit as part of its business planning, for example
in decisions regarding the timing and amount of investments in
areas such as infrastructure. Taboola believes that the use of
ex-TAC Gross Profit provides an additional tool for investors to
use in evaluating operating results and trends and in comparing
Taboola’s financial measures with other similar companies, many of
which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures are subject to inherent limitations
because they reflect the exercise of judgments by management about
which items are excluded or included in calculating them, which may
vary from period to period. The Company’s long-term ex-TAC Gross
Profit operating goal for 2025 is not guidance or a projection.
Taboola is not able to provide a similar goal for 2025 gross
profit, the most directly comparable GAAP measure. These measures
are not predictable for 2025. As a result, no reconciliation could
be provided without unreasonable efforts.
For the same reasons, we are unable to address the probable
significance of the unavailable information.
Contacts
Taboola
Investor
Contact: Stephen
Walkerinvestors@taboola.com
Press Contact:Dave Struzzidave.s@taboola.com
Yahoo
Allison Butlerallison.butler@yahooinc.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/baef05c6-cb32-4fab-9cc5-a6687aae3168
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