World

Taboola acquires Connexity, e-commerce marking firm for $800M

Taboola, the company that operates a popular grid-based advertising and content recommendation network across media properties
Taboola acquires Connexity, e-commerce marking firm for $800M
Taboola acquires Connexity, e-commerce marking firm for $800M

Taboola, the company that operates a popular grid-based advertising and content recommendation network across media properties, today announced an acquisition to expand its reach further into e-commerce, its first big move since going public in June by way of a SPAC: it is paying $800 million in a combination of cash and stock to buy Connexity, a marketing technology company that operates retail- and e-commerce-focused advertising network. Symphony Technology Partners has owned Connexity since 2011.

The deal, which includes $260 million cash on hand, $300m from committed debt financing, and approximately $240m through the issuance of ordinary shares to the seller, will increase Taboola’s size and diversify it. Taboola currently has a market capitalization of $1.9 billion. Outbrain, meanwhile, is in fierce competition. Although the two companies were originally set to merge, Outbrain went its own way and went public.

Taboola stated that it expected the combined company will have a gross profit of more than $500 million for its fiscal year ending March 31, 2021 (excluding traffic acquisition costs or TAC) with $185 million in adjusted EBITDA. Both figures are expected to grow 20% between 2020 and 2021.

Connexity used to be called Shopzilla, but it was rebranded as PriceGrabber. It has also acquired a variety of related businesses over the years, such as Become.com and Skimlinks. (Even Connexity itself was an acquisition made by Shopzilla when it was primarily a shopping search engine.) It’s enabled the company to build a large network that is focused on e-commerce.

Although Connexity focuses more on e-commerce and Taboola is focused on content recommendations, Connexity focuses more on advertising. Both companies are viable alternatives to big players in advertising discovery and discovery. This gives publishers and retailers an alternative way to make revenues and find new customers, while also allowing them to sell data to Amazon, Google, Facebook, and Amazon.

Adam Singolda, Taboola’s CEO and co-founder, stated that Taboola was going public to sell investors on the idea that it would expand into new types of recommendations. This would cover new segments and increase the company’s scale.

He said, “We believe that e-commerce is the future of the open web,” he continued.

Today, Taboola has 9,000 partners in digital property, 13,000 direct marketers, and 500 million daily active users. Publishers can use the content recommendation format on Taboola to recirculate both their own content and that of advertisers and publishers on the Taboola network.

Connexity’s portion covers affiliate links, influencer advertising, in-stream ads, shopping search ads, and many other activities. Its customers include 1,600 merchants and 6,000 publishers. (Walmart and Macy’s are just a few of the more prominent of these). It claims that its network includes 40,000 retailer-oriented publishers who can choose from a pool containing 750 million product offerings and reach a total of 100 million customers.

It claims that its activities have generated more than 800 million leads and will generate more than $2 billion in sales in 2020 in an e-commerce market that is fragmented.

This is still only a small portion of the pie. eMarketer estimates that there is a $35 billion e-commerce media market in the United States alone.

Disclaimer: We may link to sites in which we receive compensation from qualifying purchases. We only promote products and services that we believe in.

Continue Reading

×