Outbrain on Thursday said it agreed to buy video advertising platform Teads from Altice International in a $1 billion deal that will create a digital media platform reaching 2 billion consumers worldwide.
“It’s a real a transformational deal,” David Kostman, chief executive of Outbrain, said in this video interview with Beet.TV contributor Rob Williams. “The two companies are really best-in-class in what they do.”
Outbrain pioneered the content-recommendation business that helps publishers to earn additional revenue by showing paid links to other digital content. Teads invented out-stream video advertising – a form of native advertising – and developed a sell-side platform with a growing business in connected television.
“We bring what we believe is the best in performance advertising, prediction capabilities and engagement of audiences,” Kostman said of Outbrain’s click-based ad revenue model. Teads is “bringing today a broad, omnichannel video-branding platform that is unparalleled; they are bringing tremendous relationships with the top, most-premium advertisers in the world.”
As part of the agreement, Outbrain will pay $725 million in upfront cash and $25 million deferred cash. Outbrain also is offering 35 million shares of common stock and $105 million of convertible preferred equity, the companies said. The transaction will result in Altice owning 42% of the combined company.
Open-Web Strength
“Combining these two assets creates a real opportunity to build what people have been looking for, which is an end-to-end, full-funnel platform on the open internet that could rival the capabilities of walled gardens,” Kostman said.
In digital advertising, a walled garden describes a media company that operates as a closed ecosystem, completely controlling access to consumer data and types of advertising. Walled gardens not only include Alphabet, Amazon and Meta Platforms, but also the growing number of connected television apps.
Kostman said the combination of Outbrain and Teads offers advertisers a partner with the ability to reach mass audiences across the open internet, and at different touchpoints throughout the purchase funnel.
“We have about $1.7 billion of advertising revenue that flows through the two companies,” Kostman said. “This is a partner that can deliver global campaigns at scale, and do it across the funnel so you could build your brand awareness with us [and] drive consideration down to a conversion.”
