Yahoo will snap up a 25% stake in Israeli-founded digital tech company Taboola Inc. as part of a 30-year commercial agreement to help boost advertiser offerings on its digital properties.
Under the terms of the exclusive agreement, Taboola will be the provider of native advertising and content on all of Yahoo’s internet sites, which is expected to drive more than 800 billion impressions. In exchange, Yahoo will receive 24.99% of Taboola’s total issued and outstanding shares, with about 60% in standard ordinary shares and 40% in new non-voting ordinary shares.
As a result of the deal, Yahoo will become Taboola’s largest single shareholder and will get one seat on the digital advertising platform’s board of directors. The two companies estimated that the partnership will generate $1 billion in annual revenue by 2025. The deal is expected to close in the first quarter of 2023.
Since Taboola started trading on the Nasdaq via SPAC merger last year at a valuation of about $2.6 billion, the stock has slumped over 60%, struggling with a slowdown in the advertising market. On Monday, Taboola shares jumped more than 50%, giving the software company a valuation of about $445 million.