Taboola and Outbrain, which specialize in content recommendations decided to merge

Taboola and Outbrain, which specialize in content recommendations at the bottom of online articles and sometimes on the pages of the site, report a merger agreement between them, subject to regulatory approvals.
These are the top two content recommendations companies. Under the agreement, Outbrain shareholders will receive 30% of the subsidiary's shares and $ 250 million in cash. The profits of the two companies are estimated at $ 50-70 million a year.
Adam Singolda, founder and CEO of Taboola, will run the merged company that operates under the Tabula brand. The subsidiary will employ approximately 2,300 employees.
Taboola and Outbrain use an algorithm that analyzes the preferences of surfers on content sites and offers them additional content from sites or sponsored content. Companies have grown significantly in recent years, but they still do not represent a significant chunk of Google's Internet advertising pie.
Google, through the Gugladesense system, is the largest in the field and enables the integration of solutions similar to those of Taboola and Outbrain. Beyond that, Google's capabilities are of course large and powerful, and its further advances in digital advertising are affecting the entire industry, including Outbrain and Taboola.
In other words, the merger is a form of necessity against the real competitor - Google. With all due respect to the Israeli players, Google can quite quickly and easily make their business bleed. However, regulators in the United States and the EU are now investigating whether Google and Facebook are acting as a monopoly in the advertising market, a move that could lead to limiting their considerable power in the market.
Outbrain, founded in 2006 by Yaron and Eitan Galay and Uri Lahav. She was the first in content recommendations. Tabulla was founded in 2007 by Singolda. The two companies have raised $ 150 million each so far, and the merger may also serve a major future on Wall Street.
Adam Singolda, founder and CEO of Taboola, will head the merged company and will operate under the Tabula brand. The subsidiary will employ approximately 2,250 employees - with Tabola accounting for 62% of the workforce, in Israel approximately 900 employees are employed at the Outbrain Development Centers in Netanya and Tabula. garden.
Rumors of a possible merger between the two companies have risen frequently over the past four years, and for many in the industry it has been a matter of time and will help both improve their digital advertising market with Google and Facebook, which control about 60% of the US advertising market.
Taboola and Outbrain have developed an algorithm that analyzes the preferences of different readers and offers them articles - text or video - that may be of interest to them. In this way, they create traffic (traffic) and extend the stay of surfers 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.
This form of advertising also includes promotional or branded content that is advertised as part of the systemic content of the sites. For example, a company that wants to promote its new product will be willing to pay content recommendation companies to promote an article that compliments that product. Their business model is known as CPS Cost Per Sale - each click on these articles generates content recommendations for companies with a certain revenue share, which they share with the site from which the user came (Taboola and Outbrain reserve about 15% -20% of the amount). The market has evolved rapidly, mainly due to the extinction process of the traditional online advertising model based on display ads that are no longer effective and the need for content sites to generate new revenue.
Alongside the on-site recommendation engine, companies provide tools that allow advertisers to target audiences with similar characteristics in terms of content preferences to their customer audience (Lookalike Audience) - for example, the country newspaper is able to target people who tend to read long articles on other content sites; Or a bank capable of targeting people who read articles about buying homes and mortgages.
Tabula's unique assets are "Tabula News Room" which provides content sites with information and an A / B Testing system for titles (testing different options on two user groups) and home page locations (Outbrain had a similar product called Visual Revenue that closed about two years ago); A product called "Tabula News" - which enables to make infinite torch content sites similar to social networks, the news torch is even integrated by default on Chinese ZTE mobile devices; Tabula's video advertising capabilities, which were given to it as a result of the acquisition of Israeli startup Convert Media in 2016, are also considered to be stronger.
Outbrain's significant asset is an OEN - Outbrain Extended Network advertising system developed as a result of the Slovenian company Zamente in 2017. OEN allows advertisers programmatic advertising (automatic and real-time purchase of advertising space) on several websites at the same time and even when the company has no agreement with them, thereby increasing its advertising distribution system.