DOJ Probes Taboola’s Deal To Buy Outbrain

Justice Department antitrust officials are looking to find out if a deal to combine the internet’s two largest content-recommendation firms would suppress competition in a market that has provided a steady stream of revenue to online publishers.

The department has been interviewing clients and rivals of Taboola Ltd. and Outbrain Inc., asking detailed questions about whether their combination could be harmful for publishers and online ad networks, according to people familiar with the matter.

Taboola Ltd. in October agreed to buy Outbrain Inc. in a cash-and-stock deal that would have Outbrain shareholders receive $250 million in cash and Taboola stock equivalent to 30% of the combined firm.

Both companies generate “promoted stories” and “around the web” sections that appear next to articles and videos online, unusually at the bottom of a webpage. In essence, the rival firms each rent the basement space on webpages, while some other ad networks, including Alphabet Inc.’s Google, deliver ads in more prominent positions.

Those bottom sections contain a mix of material, including sponsored content and advertisements styled to resemble news stories, usually with tantalizing headlines like “The Best Way to Stop a Barking Dog (It’s Genius)” and “She Had No Clue Why the Crowd Started Cheering.”

The companies have become a mainstay for many digital publishing executives, some of whom rely on regular payments from Taboola and Outbrain.

Outbrain’s clients include CNN, the Guardian and the Washington Post, while Taboola’s clients include Fox News and NBC News. It isn’t known which clients the Justice Department has spoken to.

Full Content: Wall Street Journal

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