The two leading Israeli content recommendation companies Taboola and Outbrain are expected to report today, Thursday, that they have signed a merger agreement. The deal is subject to regulatory approvals.
Under the agreement, Taboola will pay Outbrain shareholders $250 million for 30% of the company’s shares. Taboola will hold a 70% stake in the subsidiary’s company. Adam Singolda, founder and CEO of Taboola, will head the merged company and will operate under the Taboola brand.
The subsidiary will employ approximately 2,250 employees – with Taboola accounting for 62% of the workforce. 900 employees are employed in Israel.
Taboola was founded in 2007 by Singolda and has raised $180 million to date. Its investors include Fidelity, Pitango, Catalyst Fund, Marker and Eyal Gura. Its strategic partners include the Daily Mail, MSN, USA TODAY, CNBC, Fox Sports Channel, Microsoft, Huffington Post, the Independent and Business Insider.
Outbrain which founded in 2006 by CEO Yaron Galai and Ori Lahav has raised $150 million since then. Mainstream media using its content including CNN, Fox News Sky, The Guardian, the BBC, and The Washington Post. Outbrain says that it reaches 1.2 billion users each month.
Taboola and Outbrain have developed an algorithm that analyzes the preferences of different readers and offers them articles – text , video apps and products – that may be of interest to them. In this way, they create traffic and extend the stay of users on the content sites. The category of advertising to which the two belong is called Native Advertising – that is, content that is naturally integrated into the reader’s sense of content.