Not long ago Taboola announced our transformative, 30-year partnership with Yahoo. Earlier this month we hosted an investor event in our NYC office to share more information about our joint vision, our rollout plan and the financial benefit we expect.
Adam Singolda, our Founder & CEO, kicked off the day with the story of Taboola and its mission to power recommendations in the open web. Adam spoke about some of the challenges advertisers face as they try to reach audiences at scale on the open web, which is still highly fragmented. It is easy to buy search through Google, and easy to buy social through Meta, but Adam asked the audience, “Imagine I gave you $10 to spend on dozens of ad tech companies in the open web, each with their own dashboard, ad formats, process – it’s really hard.” The partnership with Yahoo makes Taboola the largest native advertising platform and an easy choice for brands side by side in revenue to companies like Snap, Pinterest, Twitter and others.
Adam then discussed additional opportunities that could double or triple the value of the partnership, from developing innovative ad formats and experiences, building unique contextual segments for targeting, leveraging Taboola’s header bidding technology, and driving e-commerce revenue through high intent data.
Adam ended his session by saying that assuming the Yahoo integration is fully live in mid 2024, we expect to generate $200M+ EBITDA and $100M+ Free Cash Flow in 2024.
In a panel hosted by Monica Mijaleski, Yahoo’s CFO and board member at Taboola, Adam and Jim Lanzone, Yahoo’s CEO, talked about the benefits of this partnership for advertisers, publishers, and investors. They also discussed their growth strategies for Taboola and Yahoo, with Adam believing that Taboola can double Yahoo’s native advertising business to $2B through new user experiences, optimization, AB testing, innovating formats, and investing in contextual advertising and e-commerce.
In the next session, Eldad Maniv, Taboola’s President & COO, discussed the integration of Yahoo into Taboola’s ecosystem. Eldad started by saying he has been with Taboola more than a decade, and he is personally leading the integration project. Eldad noted that we’re executing the integration while maintaining a critical balance between the demand and the supply. This is critical to the success of the partnership as there are thousands of existing Yahoo clients that are spending nearly $1B a year, and it’s imperative to continue to see success during migration to Taboola.
The integration involves a collection of projects, including tech, advertisers, supply, and people, with each focus area having mission-critical projects. He emphasized the need for feature and format parity, data access, reporting, policy alignment, and hitting performance goals for advertisers. Eldad also mentioned the need to optimize placements and provide insights and support staff to double the size of the business and gain efficiencies.
Eldad concluded his session saying there’s a lot of work to be done on multiple fronts, but we have a clear path forward and the team in place is ready to execute and get this transformative partnership launched.
Steve Walker, Taboola’s CFO, presented an overview of the four phases of the integration project, detailing when revenue and costs are expected to begin. The phases are Close & Plan, Build & Test, Ramp & Transition, and Optimize & Grow.
Steve stated that the partnership with Yahoo is financially transformative. We plan an incremental investment of $30M in 2023 as we execute the integration and staff the teams. The payback will be highly accretive, we expect to generate $1B in revenue, $150M in AEBITDA and $80M Free Cash Flow annually, and that does not take into account additional growth initiatives that we will be launching.