Fiercely competitive rivals Taboola and Outbrain had announced plans to form a content recommendation monolith in last October.
With advertisers restraining their spending post-pandemic, both Taboola and Outbrain’s businesses became shaky. While Taboola put a temporary pause on its revenue guarantees, Outbrain didn’t pull away from its existing guarantee deals.
The changed situation led Taboola to seek renegotiation to either reduce the cash element or increase its equity stake, which was declined by Outbrain. This caused tension between the partners, and both parties have decided to walk away from the deal.
The news is likely to be welcomed by publishers, who have had reservations about a single big player dominating the market. “If there’s no competition in the market, then you lose your negotiating leverage,” a publishing executive said.
[7 minute read]