Taboola and Outbrain cancel their $850 million merger

Online advertising is a game of scale, but one attempt to consolidate two competitors to better take on Google and Facebook has fallen apart. Taboola and Outbrain, startups that each provide publishers with ad-based content recommendation platforms have called off a planned $850 million merger that would have valued the combined company at more than $2 billion. The news of the cancellation had been rumoured in the Israeli press (and tipped to me by Avihai Michaeli, a Tel Aviv-based senior investment banker and startup advisor), and TechCrunch has now confirmed it with both companies, too.

The first of those was the global health pandemic. Both Taboola’s and Outbrain’s businesses are based around widgets that they integrate with publishers’ sites, which provide a way for publishers both to recirculate their own content, as well as share it, alongside sponsored content and ads, on other sites that also run the widgets. But in the last eight months, the world of ad-based media has taken a nosedive as many large brands reined in their ad budgets, and that had a knock-on effect on other players within the eco-system.