For both buyers and publishers, Yahoo‘s restructuring has upsides and downsides.
For brands and agencies, it might increase Yahoo’s audience reach and amount of available inventory, while at the same time, net-net, likely increasing ad prices because of greater competition on the demand side.
For publishers, the restructuring will likely increase revenue due to greater demand. However, increased competition between publishers will temper those revenue gains some.
For both Yahoo! and Taboola, the deal is nothing but goodness. Yahoo is streamlining its business, massively reducing costs while increasing revenue. For Taboola, this is in effect a lucrative product distribution deal. It will also allow Taboola CEO Adam Singolda to invest in header-bidding technology and ecommerce (the latter likely referring to retail media or commerce media products).
The 30-year cooperation deal, in which Yahoo took a 25% stake in Taboola, will allow the company to take a couple of steps:
- Yahoo can close down its own SSP -which lost money- and use Taboola’s. (Yahoo CEO Jim Lanzone said the company will also use other SSPs). This is where most of the 1,600 layoffs took place, equivalent to more than 50% of Yahoo’s ad tech staff, or 20% of its overall staff, a whopping reduction that went largely ignored. Result: Yahoo’s steps will possibly increase audience reach and available inventory for buyers, while increasing competition between publishers, putting pressure on ad prices and revenue. Yahoo itself will massively reduce costs while presumably retaining some SSP revenue via the stake in Taboola.
- Yahoo also claimed that by using Taboola’s DSP, together with its own DSP (to be renamed “Yahoo! Advertising”), it will increase demand by a factor of 8. This will tend to increase ad prices, and increase revenue for Yahoo.
Yahoo Lays Off 20% Of Workforce, Shuts Down Native Ad Platform Gemini
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