By Yuvraj Malik in Bengaluru
(Reuters) – Yahoo Inc will acquire a nearly 25% stake in advertising tech firm Taboola Inc and become its largest shareholder, the companies said in a joint statement on Monday, in a push to deepen advertising on their digital properties.
As part of the partnership, Taboola will power native content and advertisements across Yahoo’s sites for 30 years, while the U.S. tech company will get one seat on Taboola’s board.
Taboola’s engine pushes links to articles paid by advertisers – known as native advertising – on sites of publishers including CNBC and NBC News.
The acquisition comes at a time when advertisers have downsized their budgets in response to macro-economic challenges, affecting businesses from media publishers to big tech platforms such as Alphabet Inc and Meta Platforms Inc.
Taboola, whose shares surged 25% in pre-market trade on Monday, expects the deal to boost its revenue, EBITDA and free cash flow.
The two companies estimated that the partnership will help generate $1 billion in annual revenue by 2025, but did not provide any further financial details.
The companies plan to seal the deal in the first quarter of 2023. Taboola said it will host a special general meeting on Dec. 30 to seek shareholders’ approval.
The move is the boldest bet by Yahoo under its new owner. New York-based Verizon Communications Inc had sold the once-popular email service to Apollo Global Management in May 2021.
