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Taboola Raises $15M More for Video Content Recommendation

February 19, 2013

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Israel-based Taboola has raised $15M in additional funding for its content recommendation service. The round was led by Pitango Venture Capital; earlier investors Evergreen Venture Partners, WGI Group and Marker. Taboola has now raised $40M. Taboola does video content recommendation and you have probably seen their widgets on WallStreetJournal.com, Weather.com, Bloomberg.com and other sites. The company says it is serving 1.5B widgets per day.

In contrast to Google Adsense and other ad networks, Taboola’s advertisers are publishers that want to drive traffic to their site. So they sit between publisher A who is running Taboola on their site and is paid for that and Publisher B that is paying for traffic to its site.

Taboola competes with Outbrain, which also came out of Israel and which has raised $64M to date. We wonder why investors are so enamored of this space. We understand that Taboola and Outbrain have high margins and we understand that they have done impressive work to get on so many publishers sites, when publishers have so many other rivals for the page space.

But we are not very impressed with the technology that Taboola and Outbrain run. The talk about personalization and their advanced algorythms. The company touts its proprietary technology, called EngageRank, which it claims can algorithmically quantify how users interact with content, and predict and recommend content of interest to them, in real-time. but, especially with Taboola, what we see a lot of the time are click bait with images of Kim Kardashian’s cleavage or similar. How much technology does it take to detect a higher click through rate on that? We see that images such as the ones below don’t run on say Bloomberg.com but we wonder if most of the money being made by Taboola is via images like these that Google Adsense and others wouldn’t allow advertisers to run.

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