Yahoo has agreed to acquire a 25% stake in Israeli-origin company Taboola as part of a 30-year commercial agreement, becoming the single-largest shareholder in the digital advertising company.
As part of the agreement, the Israeli company will exclusively power native advertising across all of Yahoo’s digital properties, the companies said.
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.
Taboola had gone public on the US stock market in 2021 via a merger with a blank cheque company at a valuation of $2.6 billion. Its fortunes have, however, taken a hit since then and the company now commands a market capitalization of just $455 million.
Yahoo, one of the first Internet giants to emerge in the 1990s, is now owned by private equity firm Apollo Global.
Yahoo said the Taboola deal is profitable for it, as it will help the company enhance its own unified advertiser offerings, enhance consumer experiences across Yahoo’s owned media properties, and participate in significant shared value creation.
Foe Taboola, the deal is key as it will help it scale its operations as a leading consumer tech company reaching nearly 900 million monthly active users worldwide.
The Israeli company said that, 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.
“Partnering with Taboola enables Yahoo to further enhance the contextual and native offerings within our unified advertising stack,” said Jim Lanzone, CEO of Yahoo.