Yahoo Inc will acquire a nearly 25 percent stake in advertising tech firm Taboola and become its largest shareholder, in a push to deepen advertising on their digital properties.
Taboola will power native content and advertisements across Yahoo’s sites for 30 years, while the U.S. tech company will get one seat on Taboola’s board.
Taboola’s engine pushes links to articles paid by advertisers – known as native advertising – on sites of publishers including CNBC and NBC News.
The acquisition comes at a time when advertisers have downsized their budgets in response to macro-economic challenges, affecting businesses from media publishers to big tech platforms such as Alphabet Inc and Meta Platforms.
Taboola expects the deal to boost its revenue, EBITDA and free cash flow.
The two companies estimated that the partnership will help generate $1 billion in annual revenue by 2025, but did not provide any further financial details.
The companies plan to seal the deal in the first quarter of 2023.
The move is the boldest bet by Yahoo under its new owner. New York-based Verizon Communications sold the once-popular email service to Apollo Global Management in May 2021.