Taboola is a company that operates grid-based advertising and content recommendation network across media properties was made public in June through a SPAC. It has now entered a deal to buy Connexity which is a marketing technology company for $800million. Taboola will pay the amount in a combination of cash and stock to acquire the company. Taboola has a market capital of $1.9 billion and faces competition from Outbrain. Outbrain also went public earlier this month.
With the acquisition, Taboola expects to have a combined profit of $500 million for the fiscal year which ended on March 31, 2021. This amount is 20% higher than that of last year.
Connexity works for e-commerce and online businesses and was called Shopzilla before rebranding. Taboola focuses more on content recommendations and advertising. Both the companies can be seen as an apt alternative for the current big players in the field of advertising and discovery. It will enable their customers to find new customers without having to sell data and money to the big players and search giants. Taboola has earlier received a lot of criticism for its modus operandi so we may have to wait and watch what this acquisition will change.
Taboola as of now has 9000 digital property partners, 13000 direct advertisers, and 500 million daily active users. The publishers can recirculate their content using the content recommendation format. Connexity on the other hand has affiliate links, influencer marketing, in-stream advertising, shopping search ads on its services list. There are over 1600 merchants who use the platform with 6000 publishers including Walmart, Skechers, and eBay. Connexity plays an important role in generating shopping leads and is expected to be valued at almost $35 billion in the US.
So, with this acquisition, Taboola is expecting that the publishers will generate more revenues as they get deeper into it which will, in turn, benefit the company. Taboola is expecting to keep the multichannel offering of Connexity as it is. Connexity had its own share of solid ground even before the acquisition as the global pandemic shifted all the focus to e-commerce. Their strive for the top position is more facilitated now with this acquisition.