Taboola and Outbrain Israeli Companies Merge into One

Huge merger in Israeli high-tech: Outbrain and Taboola unite

For a considerably long time, the two high-tech giants have been in negotiations considering a merger, and last Wednesday the deal was signed and a message was sent to both of the company shareholders. The merged company’s net profit is expected to be $ 70–80 million, with two-thirds attributed to Taboola. The company will employ 2,250 employees. Taboola will pay Outbrain shareholders $ 250 million and hold 70% of the merged company, valued at $ 2 billion; Taboola founder Adam Singolda will serve as CEO.

In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions. They combine two previously separate firms into a single legal entity. Significant operational advantages can be obtained when two firms are combined and, in fact, the goal of most mergers is to improve company performance and shareholder value over the long-term. A merger involves the mutual decision of two companies to combine and become one entity. The combined business, through structural and operational advantages secured by the merger, can cut costs and increase profits, boosting shareholder values for both groups of shareholders.

Both companies are active in the field of content recommendations. Yaron Galai and Ori Lahav founded Outbrain in 2006 to solve the problem publishers had in replicating the print experience of turning a page to discover the next article or product on the web. Today, Outbrain develops the feed technology that makes the act of exploring and discovering new things on the open web possible. Adam Singoda founded Taabola in 2007. In the years since then, Taboola has become the largest discovery platform, realizing tremendous growth in users and revenue. Today, with over 1,000 employees Taboola’s journey continues, building new technologies that will help people find what’s interesting and new wherever they are.

The purpose of the merger is to improve the competitiveness of the two against Facebook and Google that dominate the online advertising market. The two companies are active in the area of content recommendations, providing links to additional articles for surfers on various content sites, some of which constitute marketing content integration. In the end, it was decided that Taboola would lead because of its revenue growth, which created a gap between it and Outbrain.