Yahoo announced on Tuesday its acquisition of Artifact, an AI-powered news platform co-founded by the creators of Instagram. The deal underscores Yahoo’s commitment to integrating AI technology into its news and web services offerings across the United States.
This acquisition comes at a challenging time for digital media startups, as they struggle to generate revenue amid the dominance of Big Tech giants like Alphabet’s Google and Meta Platforms in the digital advertising market, Reuters news report said.
Meta Platforms has generated annual revenue of $134.90 billion (up 16 percent) in 2023, mainly by selling digital advertising space on its social media platforms.
Retail digital advertising spending is expected to grow 17 percent in 2024 to $88.13 billion and represent 28.7 percent of US digital ad spend. CPG, the No. 2 buyer of digital ads, will also have strong digital ad spending growth of 15.5 percent this year. Retail’s share of digital ad spending will peak in 2024, says eMarketer report.
Artifact, launched in early 2023 by Instagram co-founders Kevin Systrom and Mike Krieger, aimed to revolutionize news delivery with its AI-driven approach. However, in January, Artifact announced the winding down of its app operations, citing limited market opportunities.
Yahoo already owns prominent news brands such as TechCrunch, Engadget, and Yahoo Finance. Yahoo also holds a minority stake in the content recommendation platform Taboola.
Yahoo sees potential in Artifact’s technology to enhance its news operations. The integration of Artifact’s AI-powered recommendation engine and other features is expected to enable Yahoo to scale its news content and deliver personalized experiences to its audience.
Financial details of the acquisition were not disclosed. Yahoo’s move to expand its portfolio follows its acquisition by private equity firm Apollo Global Management for $5 billion in 2021.
Kevin Systrom and Mike Krieger, who left Meta, formerly known as Facebook, in 2018 following the acquisition of Instagram, will collaborate with Yahoo in an advisory capacity during the transition period. News reports suggest their departure from Meta was attributed to strained relationships with Meta CEO Mark Zuckerberg and differences in visions for Instagram’s future.
Baburajan Kizhakedath
