Taboola and Outbrain, two content recommendations companies that employ roughly 500 people, were formed the same year (2006) and have each raised substantial sums of venture capital, are in advanced merger talks, reports the Israeli news outlet Calcalist.
The deal isn’t final, says the report, but the two companies have moved past many of the sticking points that ended earlier talks between the two companies, including in late 2015.
The report adds that, if successful, the merged company will be valued at more than $1 billion.
Many publishers use Taboola and Outbrain to help readers discover more stories they might like to read, from that publisher or other media sites. Likely, you’ve encountered their links near the bottom of a site, suggesting “other stories you might like.”
Combining efforts would seem to make sense, based on the many synergies between the two, including that both companies are headquartered in New York and feature development centers in Israel.
Still, the merger — and its reported combined value — also reflects tougher times for adtech more broadly.
Just two years ago, Taboola — which provides billions of content suggestions to hundreds of million of users each month, as well as sells analytics to publishers and brands — raised $117 million in funding at a valuation just short of $1 billion.
Meanwhile, a 2013 report surfaced in another Israeli outlet, Haaretz, saying that Outbrain was weighing an IPO that would raise between $100 million and $300 million and value the company at up to $1 billion. Very soon after, the company raised $35 million in additional funding.
Altogether, Outbrain has raised $194 million from investors, shows Crunchbase. Its investors include GlenRock Israel, Lightspeed Venture Partners, Gemini Israel Ventures, Carmel Ventures, Index Ventures, HarbourVest Partners and Susquehanna Growth Equity. Taboola has raised nearly as much — $160 million, says Crunchbase — from Evergreen Venture Partners, Crescent Point Energy, Marker LLC, Pitango Venture Capital and the Daily Mail.
Both companies have been acquiring new tech as more content gets consumed on mobile devices. Last July, Taboola acquired a company called ConvertMedia for just less than $100 million. The company created a recommendation engine designed specifically to identify and recommend online videos. In January, Taboola also acquired for undisclosed terms Commerce Sciences, which built a platform for smaller e-commerce companies to add “Amazon-style” personalization to their websites.
Outbrain, which has made four acquisitions, counts among its newest purchases Revee, an L.A.-based company that claims to be capable of letting publishers know exactly how much individual articles are generating in revenue, in real time. It acquired the company in March of last year.