By Luís Daniel Rijo in Display News — Sep 9, 2020

Taboola and Outbrain merger called off

Nearly one year after of announcing a merger deal, Taboola and Outbrain today called off the deal publicly. Sources said that the confidential deal has expired last month without an extension of the agreement.

Yaron Galai said this was not the expected outcome. Outbrain’s CEO wrote he would not comment on specifiics as the details of the deal and its anticipated ending are confidential. Yet, Yaron Galai commented that Outbrain and Taboola “proved to be too different to be mixed,” and compared the merger to mixing water and oil.

Yaron Galai stated that Outbrain is the “most trustworthy partner for the world’s best publishers, and for their readers.” He wrote trustworthy in bold.

The Taboola/Outbrain merger was announced in October 2020. The merger was more of an acquisition, where Outbrain shareholders would receive shares representing 30% of the combined company plus $250 million of cash.

In March this year, Coronavirus pandemic hit Taboola’s ad revenue. Adam Singolda, Taboola CEO, wrote Taboola had to switched temporarly the revenue guarantee with publishers to a shared revenue model. AdExchanger reports that the breach of the publisher agreements led Taboola to lose publishers, including Fox News and News Corp in the United Kingdom.

The merger deal wasn’t completed due to the lack of a decision from the authorities in Israel and in the UK. Germany and the US had already approved the deal.

Ruti Levy, Tech Section Editor at TheMarker, wrote Taboola sought to reopen the original deal and reduce the amount of cash it had to handover as part of the transaction, from $250m to $100m. Both parties didn’t reach a new agreement.

Taboola and Outbrain were founded in Israel around 14 years ago. The companies claim to be profitable. The combined companies would have over 2,000 employees across 23 offices, serving over 20,000 clients in over 50 countries.

Digiday reports publishers are relieved with the cancelation of the merger, as both companies restart the competition. Taboola is now moving to reinstate some of the guarantee deals.

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