All right. Welcome, everybody. Thanks for coming out. My name is Rick Haas. I'm the Head of Investor Relations. I have a background 12 years on the buy side, five years sell side, and I was an Air Force pilot before that, so I'm new to Taboola. It's nice to meet you. Grateful for everybody to come out today. We should have a great information session. I think a lot of great discussion points we're gonna hit today. Unfortunately, I have to read the safe harbor statement. Certain statements today, including our expectations for future periods are forward-looking statements. They're not facts and subject to material risks and uncertainties described in our SEC filings.
These statements are based on currently available information. We undertake no duty to update them except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the investor presentation. Future events could differ materially and adversely from those anticipated. During today's discussion, we will use terms defined in the investor presentation. We refer to non-GAAP financial measures. For definitions, explanations, and reconciliations to GAAP, please refer to the appendix in the investor presentation posted on our website. Thankfully, I didn't have to read that one. Anyway, like to introduce Adam Singolda, our CEO.
Thank you, Rick. four weeks on the job, and look at you now. Good morning, everyone. Thank you for coming in. I know some of you took a flight in, so I appreciate that. Thank you for the folks working from home on Zoom or wherever you may be, not judging. Thanks for joining us and Jim and Monica as well who will join us today. Before I kick this off, just a personal story. Today, as I was preparing for this day, my son, Ozzie, who is 5 years old, asked me, "Dad, why do you have a button shirt on? What's going on?" 'Cause us Israelis, we don't really wear button shirts all the time. I told him, "You know, it's a big day for us.
We're now discussing a 30-year partnership with an iconic brand, Yahoo. We're gonna talk about, you know, generating over $1 billion in revenue a year." He asked me that one question you hope your son and your kid never asks you, which is, "Dad, what's a billion?" I told him, "You know, you know what? You can figure that out when you work at the renewal in 30 years." On that front, so excited to be here today. We have a packed couple of hours. I will kick it off with just a vision and mission of Taboola. The partnership with Yahoo! obviously, how we believe we can double and triple that over the next many years. We'll have a fireside chat with Jim and Monica, who just joined our board. She's Yahoo's CFO.
Eldad, our President and COO, will walk over the integration and how we, you know, bring this dream to life and capture that value that we're so excited about. Steve Walker, our CFO, will kind of summarize the daily messages, the financial implications, and we'll have a Q&A at the very end. Starting with, you know, just a recap of Taboola. I started the company 15 years ago because I couldn't find anything to watch on TV, thinking I should not be looking for TV shows. TV shows should be looking for me. You know, we'll never have enough time to read all the books we wanna read and watch all the movies we wanna watch. There needs to be a recommendation engine that helps us to discover things we love but we never knew existed.
A lot of time we're thinking of ourself as a search engine, but in reverse. Instead of expecting people to search for information should be searching for us. Even Google founders back in the day said that the perfect Google would be an empty page. The truth is that all of you here or chiming in on Zoom, you're using recommendations all the time. In fact, you can't imagine your life without it. You're using recommendation engines when you watch TV or when you shop online or when you listen to music or, of course, when you spend time on social networks, if you do that. That's exactly kind of the mission that we have at Taboola.
We wanna bring the similar relevance and the personalized experience consumers have on walled gardens to the open web so that every publisher, every app, every connected TV app, every service that lives outside of the walled garden can enjoy a recommendation engine, much like we experience on social networks every day. The open web, it's a huge market. It's a $70 billion market opportunity for Taboola. There's a lot of good things around that market. The first is that people spend 25% of their time in the open web, which is more than search and more than social in aggregate. The opportunity to create an amazing experience for consumers is immense.
The second thing is that with the rise of privacy, which all of us have been tracking dearly, you know, since 2017, when Apple launched ITP, making third-party cookies deprecated, or last year when on apps with IDFA, you can't track consumers between apps. That just makes the whole need for the advertiser community to find and rely on a contextual engine that they can trust and be here for the rest of time. Like I always say, our children will be shocked that during these days, companies used to track consumers between app and browsers, and that's a bit creepy. The future is bright, the future is private, and we believe that's a great opportunity for the open web because by definition, the open web is private and safe. It's about what I'm reading as a proxy for who I am versus my identity.
Now, if you think about it, if you wanna buy the search, it's very easy to buy Google if you're an advertiser. If you wanna buy social, it's very easy to buy Facebook as an advertiser. If I gave each one of you $10 and I asked you to spend money in the open web, it's a shit show. You have met dozens of companies, small cap companies-Maybe on hundreds of millions of dollars, maybe $1 billion in revenue, each their own ad console, their own formats, their own philosophy, their own account managers. It's really, really hard. It's a huge market, but it's very fragmented. There is no Google for the open web. There is no Facebook for the open web, a company that can simplify the process of spending side by side to journalistic content that is safe and private and awesome.
That company is yet to exist. The second problem is if you actually do spend money in the open web, that's what you're getting. You're getting a banner experience. It's something that's in my way. I'm reading an article, it's in the middle. I'm trying to watch the video, it's before the video. It's in my way. It's not the experience I'm seeing when I spend an hour or more on social networks. The banner format was invented 30 years ago when Digimon and Tamagotchi were invented. It's still around like dinosaurs. When you think about, you know, trillion-plus dollar companies like Facebook and Google and Amazon and Snap combined, what you see, which is very distinctive from the open web, is that you'll never see a banner on Facebook. You'll never see a banner on a search page.
You'll never see a recommendation and a banner below it on Amazon. You'll never see a banner on Snapchat. They're all native advertising. What does it mean, native? It means that the core value of their service, whether that is a post on Facebook by my friends and then a paid post below that, whether that's a search on Google and a paid search below that, whether that's a recommendation by Amazon to a product and a paid recommendation promoted by a retailer, it's all native. The core reason I'm on that service is the way they make money. There is no banner or something in between. That's the revolution we're trying to bring to the Internet. That in 10 years, when you open the Internet, the open web, which we all love and use all the time, it feels like this company.
We wanna bring the walled garden superpowers to the open web. Of course, we're all here to talk about what could be the most amazing partnership and relationship and deal in the history of the Internet. I would think so. You know, I know it's only 10:00 A.M., but it's 5:00 P.M. somewhere, we're very excited about it. As a quick recap, there are three kind of parts to that partnership. The first one is thousands of advertisers that currently buy Yahoo natively, and will be transferred to the Taboola technology. You also have contextual segments. We spoke about privacy and opportunity to make the web contextual and safe and relevant. With the combined technology and data of Taboola and Yahoo, we can do that, and I'll talk more about it later on.
The third one is, of course, powering the variety of sites that we all use and love on Yahoo. Yahoo is already number one and number two in everything they do. It's the number one finance website. It's the number one news website. It's the second mail service. It's the second sports website. People already love Yahoo so much. Almost 900 million people go to Yahoo and spend a lot of time and engage with those amazing properties. If you think about what happens when we're fully ramped, Eldad our CEO will speak about the integration, the migration from where we are now to 100% launch on Yahoo. What happens when we're on the other side of it? I spoke earlier about the simplicity of buying social, buying search.
Imagine you're in one place, one home, one dashboard, one technology, one account management team. You can buy all of this. You can reach Yahoo, which is an amazing reach and quality and scale. Side by side to that, you can be on NBC, CNBC, BuzzFeed, USA TODAY, BBC Today. You can reach the world. Taboola is a very global company. That is such a huge step function from where we are now. You see, we used to be here before launching Yahoo, before making that partnership. We used to be side by side to smaller companies, you know, maybe $1 billion in revenue, maybe a little less, a little more. Small scale company. Good companies, smaller. Of course, you have the Amazon, the Facebook, and the Google, bigger companies, must-buy companies: search, social, retail.
You have the middle tier, kind of like the single-digit billions of dollars scale. Advertisers say, "Of course, we'll have the three must buy, but we'll play with these people because they're almost must buy. They're almost there." Right? You'll have a Trade Desk partnership, a Twitter partnership, a Snap, Pinterest, but now you'll have a Taboola with Yahoo partnership because it's big enough that it's worth it. It's a almost must buy. You're getting to the zone like we used to be here, and now we're in the West Village. I'm a New Yorker. We're in the West Village. It's a great neighborhood here. That is such a big deal from a scale perspective, but even more, we're the only company on this slide, the only one, number one, the only one that is actually truly native open web.
We can create advertising experiences on the publisher side because we work with the publisher directly. We don't buy traffic on publishers; we are publishers. We're native. We take the trash out. We do laundry. We're roommates. We are open web. We have both sides of the marketplace, which allows us to innovate and change the way the open web looks like versus guests who come and bid and show ads in the open web. If you follow our journey as investors or analysts who joined us since we went public, you know that scale is important. The reason it's important is because when you get more publisher and more reach, you get in front of more consumers, which means they interact with your engine more, which creates more data generated, which improves your yield with advertisers, which contributes a buying power.
When your yield gets higher, it means you can win more publishers and even at a better margin over time, and this flywheel network effect gets created. Our gross margin has been doubled over the last seven years as we became from the smallest company in the space to the biggest. That is important as we think about scale. I will say that, you know, we're speaking about $1 billion in revenue in 30 year. I will tell you, spending time with the Yahoo team, you know, Jim and Monica and Elizabeth and Matt and Ryan, and I can tell you every time we spend time together, we feel stronger and better. We're off to a great start. Antitrust closed the deal earlier than we expected. That was great.
Our tech teams are now having an offsite planning the future, planning the short term, the midterm, and the long term, how it's going to actually take place. You know, every time we're kind of reconvening since the deal making up until now, it's like the Sia song, you know, We Feel Unstoppable. It just feels like there's so much cultural fit that will allow us to innovate and build something great. Our dreams don't stop at what we're seeing in front of us. We think that there's so much growth ahead of us beyond $1 billion. We can double and triple that, I believe, over the next many, many years. To give you a few, this is one of them. One of them is just continue to innovate on the user experience and ways consumers interact with native advertising on Yahoo.
You can imagine video formats, story formats, and other things that consumers are used to see in other places. We have an opportunity to innovate and A/B test and see what works for consumers, what works for advertisers, and we have a great team to do that with at Yahoo. The second thing is contextual segments. Like I said, I don't believe privacy is going away. It's gonna get more aggressive. Consumers should be safe. They will not be tracking when I'm not part of you getting consent to track me. That means that the future's gonna be so much more about this curiosity graph. What am I reading and what is it connected to? The proxy for who I am, driven by my readership versus my identity.
If I'm right on that one, the future for Yahoo and Taboola is great because we can help advertisers be successful. Reaching a lot of people with great contextual segments we'll be launching and working on for the next many years. The next one is header bidding. If you listen to our earnings call, you know that's one of the top priorities for Taboola as a company. Now, what is header bidding? As a quick reminder, it means that you're able to bid into a display spot. This is display, it's not our core business. We're a native advertising company, we're able to use our first-party data and CPC advertising relationship to maybe win 5% or 10% of this, which is great for publishers because we're increasing the auction density for the display space.
It's great for Taboola because we estimate that on our existing publisher base, there's about $20 billion of display revenue. If we can take 5%, 10% of it's great. It's great for us, great for our publishers, great for our advertisers. We can only do that because we have a lot of first-party data and a lot of CPC advertisers. With Yahoo, even more. That's one more thing we can work with Yahoo on as part of our header bidding strategy. On earnings call, I mentioned that for the first time, we're seeing. This is a startup, it's been around for a year. We're seeing a few publishers generating millions of dollars a year on top of the core publisher relationship we have with them. This is obviously a big opportunity for us and a big one specifically with Yahoo.
Last but not least, you know I love e-commerce so much. You know, we're working from home, we're buying from home. We need a trusted place to review products, review financial services. I'm convinced that the head-of-the-market publishers will become huge e-commerce, financial services, travel, healthcare organizations because people want a trusted advice. They wanna know, what should I buy? Became a parent, which mortgage should I take? What strollers should I buy? What's good for my house? I can't go to the stores I used to. Maybe I don't wanna go to the stores I used to. I trust Yahoo. This is an opportunity for Taboola and Yahoo to partner up and rethink e-commerce as we combine data and technology and help consumers make, you know, some of the most important decisions of their life online.
As I finish my part, I'll say that, you know, we're very excited. We're off to an amazing start. There's a great cultural energy between Taboola and Yahoo. It's been great to work on the partnership when we did it. It's even better now doing the work. You know, our tech team are now spending time planning, thinking about milestone, all that good stuff, which is great to see. We've shared some numbers for 2024. Steve is our CFO. He always wants me to be conservative. These are the numbers we put out there saying basically, we will be ramping starting the second half of 2023 into 2024. It will be 100% live no later than mid of 2024. Of course, we hope to beat that and share with you as we go how we're making progress.
The force is with us. I'm excited. Thanks for coming in. On that one, I'll invite Jim and Monica. Thank you. I'm honored to invite Monica, our new board member, Yahoo's CFO, and Jim. I know Jim for a long time. Well, you should take this.
Oh, yeah.
Yeah.
Hi, everybody.
All righty then.
Shall we get started?
Let's do it.
Hi, everybody. Adam introduced me. I am Monica Mijaleski, Yahoo's Chief Financial Officer. Really happy to be here moderating this discussion between two people that I now get the chance to work closely with and partner with. We're gonna go straight into it.
Yeah.
I think the first question, easy one, before we get into the details of the partnership, maybe if you could both speak to how you guys know each other, how you guys first met?
Sure. You want me to hit it?
Yeah.
Well, look, historically speaking, for those who don't know, I ran a company for about 9 years called CBS Interactive, which was the digital division of CBS, but it really had... We were a top 10 internet company. I think it's ranked sixth still. You know, had things like CNET, CBS News, CBS Sports. We, we created CBS All Access, which is now Paramount+. It was a very big network of, you know, 200 million-plus users in the U.S. You know, I got there in 2011, and shortly thereafter, we shifted from Outbrain to, of all things, Yahoo's new Gemini product.
That's true.
Ironically. A couple of years later, we then made what was now the first of 2 moves I've now made from Gemini to Taboola. You know, got to know Adam over, and the company over many, many years, before we made that switch.
Yep. It's mapping seven years now.
It worked great, by the way.
Thank you.
Yeah.
We intend to meet and beat expectation.
Yeah.
My part? Yeah. My part was I was invited to a toast. It was CES. The guy we worked with at CBSi, Jason, who's a great guy, said, "You're gonna meet Jim." You know, it was CES. We went to ... Back. My story is that sort of meeting Jim, I'll say that the one thing that was great for me as a founder, first time founder, first time CEO, was to spend time with someone that was so down to earth. Back then, and still is, CBS is a huge partner of Taboola. It's great to see culture at a bigger scale. Humble, straightforward, business-oriented and still dreaming big.
I think as our reintroduction at Yahoo, and we kept in touch, but I mean, being reintroduced to the new Yahoo and the new management team, the one thing that makes me feel good about this beyond, you know, the numbers we shared with you and the size of Yahoo is the cultural fit between the teams. How, you know, straightforward we are with each other, transparent. If you saw the 24 hours leading to the signature of that partnership, FaceTiming at 4 A.M. and, you know, really talking to each other, it was awesome. More than anything, especially as you imagine a 30-year partnership, culture and people means even more than anything.
Totally agree. Next question. The news of the Taboola partnership, obviously was announced a couple of months ago. Adam, can you speak to how the news is being received by the investor community, by the Taboola employees and the new partners?
Yeah, it was, it was, it was a combination of things. We had people that were immediately happy, advertisers that were basically asking when. When we said, you know, "Be patient," they said, "When?" They said, "When" again. Advertisers just wanted bigger scale. I was just speaking on my presentation about how much I think advertisers who buy Google for search and Facebook for social are looking for just a big scale home to spend, something they can rely on. That was the, you know, that was exciting to advertisers quite immediately. Publishers, we got some happy calls and some FOMO calls. People said, "Will you be spending all of your time with Yahoo? How will you love us?
What's gonna happen?" We said, "No, that's great for everyone because this will, you know, increase the power and our opportunity to monetize as a company in general, and we'll work together on, you know, more technologies." Like I mentioned, contextual segment. There's gonna be a lot of good things coming out of that relationship that will influence, I hope, the rest of Taboola and our publishers. Employees were really happy because I think people tend to love being part of a winning team. I think, you know, Taboola now, are, you know, winning teams and now even more together. That was kind of, you know, the employee, you know, community.
Awesome. I can say that the sentiment was also the same with respect to the Yahoo employees. There's a lot of excitement. Jim, going a little bit deeper. The 30-year exclusive deal has been described as somewhat being unusual.
Yes.
Can you speak to, you know, why Taboola was the right partner? How are you thinking about how the actual deal come about?
Sure. I think everybody here probably knows, Yahoo was spun out of Verizon in September of 2021 by Apollo. I was brought in that same month, and we got to work with, you know, new team, new strategy. You know, look, Yahoo is, you know, has a new era now, is an extremely strong company, you know, with billions of revenue and profit, hundreds of millions of users. You know, there's a lot of things that needed to be optimized. One of which was the way that we went to market with our ad tech group, which was, you know, now in hindsight, we did the Taboola deal first.
You know, we had another announcement about a month ago about essentially our strategy to simplify and thereby strengthen the way that we go to market with our advertising products. We were historically doing a, what we called a unified stack of essentially doing every part of advertising in this full stack approach, which really led to us doing some things extremely well, like our DSP, which is world-class, and other things like our native business, you know, trailing the market leader. By partnering with the market leader, instead of producing that product ourselves, you get a lot of things that are great for Monica and I running Yahoo, right? One is we're certainly gonna make more money, and it's higher yield with clearly lower cost.
At the same time, extremely important for the future where we're headed, a way better user experience because you have, you know, thousands and thousands of more advertisers competing for that space. It was a no-brainer to me to make the switch to Taboola, you know, again, the market leader in the space. You know, we also bring unique value to that. That led to us being very enthusiastically now the largest shareholder of Taboola. You think about, well, neither of us wanted to think about that in the short term. We don't wanna be in a position where either of us are doing the wrong thing, either for our user experience and our advertiser base or for us, you know, putting the wrong pressure on the company.
You wanna be aligned for the long term, right? We couldn't contractually put in till death do us part, or infinity. 30 years, you know, becomes a really good way of putting a marker on that and making sure the companies are thinking long term all the time.
I did bring it up the infinity, but Apollo was not into it. I thought it's a bit much.
Put the symbol in the contract.
It did come up, but, yeah, but.
That's right.
Thanks, Jim. Over to you, Adam. Notwithstanding the commercial deal, the action deal itself means that Yahoo is a significant shareholder. Speaking for myself as now part of the board member, which I am super excited about, but really wanting to be focused and really engaged in trying to drive value for Taboola investors. How and why should investors should be excited about this?
I think for two reasons. One, financially. It's a very accretive partnership already. As this thing is gonna be live, and you'll hear more from Eldad later about integration planning and all those things. Once this is on 100% on traffic with advertisers successfully migrating, this is very accretive to all the metrics investors care about. We mentioned, you know, over 40% of revenue per share, almost 5x of free cash flow. That is around the corner. This is not long-term planning. This is within line of sight. We wanna do the right, you know, the right stuff as we integrate this. You know, we wanna make sure advertisers are happy. We wanna make sure that Yahoo is happy.
We'll do it in a rapid way, but responsibly for the long term. That's financially, this is amazing. It's only the beginning. I spoke about other things that we can do, and I think there's a lot more we can do and which goes back to the culture, faith, and trust between the companies. The second thing is that, which I love always, I'm asking myself, you know, about competitive advantage. No one deserves to win. You should only win if you're better. That's a consistent theme. You know, being first is irrelevant. You know, being most funded is irrelevant. Being the best, it's very hard to do. It takes a lot of execution and hard work and focus.
I think with this partnership, we become bigger, a better home for advertisers, who I think will look for alternative, you know, to social and search just because of all the dynamics in the market. I think we'll be a better version of ourselves on the other side of this because bigger and better, and more competitive. That's the second reason why investors, I hope should be happy.
Great. While we're with you've mentioned in some of the scenarios that you've described as part of this deal that Taboola will double Yahoo's native advertising revenues by approximately $1 billion-$2 billion. Can you elaborate on that statement?
Yeah, I think that, you know, I feel strongly about that, spending time with the team between user experience optimization and A/B testing, we'll always do the right thing for consumers first. We'll test what works for consumers, hundreds of millions of them, and for advertisers at the same time. There's a lot of upside by innovating format, user experience. Like, if you think about how rapidly Instagram is changing or, you know, Facebook is changing when it comes to what you see when you open the service, I think they can be better. You know, that's gonna be a lot of collaboration between the companies to try things, maybe break things, but long-term getting better.
The second thing is, again, I'm convinced contextual will be a big thing, which kinda takes us back, I guess, to 20 years ago when the whole search was born, which you obviously led that space. I mean, it's kinda like it's coming back in a bigger way, you know? I think our mutual scale combined as it relates to, you know, Yahoo advertisers, Taboola advertisers, mutual advertisers, there's gonna be more advertiser success in a safe and consistent way. The third one. Is e-commerce, which I still think that we're in the early stages of what we can do to drive growth. All these three things are big buckets, funny enough, they're quite correlated to what Taboola wants to do independently, as you know. That's our first board slide every board meeting.
You know, are the top 3 things we're working on. It's very correlated. I think that there's a huge growth opportunity for us.
Yeah. Net, net positive for both of us. Jim, we've spoken about the 30-year term and it being an unusual one. Obviously, over that length of period of time, how do you see Yahoo and Taboola keeping aligned and staying aligned?
Look, I mean, the easiest one obviously is that we are now the largest shareholder of the company. That makes us extremely aligned with the future here. Think that we really do bring something unique to the table, and that I do think you've talked about on your earnings call and other places about really now being truly a must-buy. It really does establish, I think, Taboola as that. As far as, like, the long term, look, I'm 52. I'm not saying I will likely be the CEO here when I'm 82. However, you know, Yahoo is about to turn 30. You know, this company has, you know, partnerships.
For those who don't know, we also own AOL, which is still a thriving business doing a lot of cash flow, and I'm sure there are partnerships there that addle. For myself, you know, I've partnered with Google in certain ways at every stop, I don't know, for now 21 years. You know, we just announced our cloud deal with them last year. And for Yahoo itself, you know, we're going on year 15, I think, of a deep Microsoft partnership. Look, these things are completely doable as the internet ages. In some ways, it's interesting to think about that in 2026, we'll only be at 20% penetration of retail sales will be online.
We're still so early on so many things, but it's now, you know, we're now firmly established as probably the number one media source, and content source in the world, 30 years in to the modern Internet. I think you're starting to see long-term deals like this be, you know, conceivable.
I don't see you slowing down anytime soon.
We'll see. We'll see.
I'm happy to work in the renewal in 30 years. I'm not sure that statement, but.
I used to work for Barry Diller. He's still going. I mean, it's possible.
All right. Staying with you, Jim, let's talk a little bit about Yahoo. Speak to a little bit about the new Yahoo-
Yeah.
The growth strategy that we've got, that we're planning on, and also how does the Taboola deal fit into that?
Yeah, I mean, I think, again, for a brand like Yahoo that's been around a while and everybody, you know, a lot of people here, I'm sure, use a lot of the different products. The right way to think about the company and how we're gonna win and be strong is the point of view of the individual brands. We are now truly a portfolio of brands. Yes, the Yahoo name sits on top of a lot of them, not all, like in Engadget or TechCrunch, and there will be others. I'm sure they, you know, those won't be Yahoo branded as we go out and become more aggressive on the M&A front ourselves.
The way that you get a company like this going is brand by brand. Yahoo Finance is number one in its space. Yahoo Sports, number one in Fantasy, top two in sports. You know, email, number two to Gmail, and so one of our largest businesses. News, we're number one. Each of them have their own unique audiences. You know, the, the notion of, you know, people go to one place and then kinda get spread out to the other properties is not really how Yahoo works anymore. People are very loyal to the individual brands. I think we've now brought in a world-class team of GMs and leaders of the company.
My whole background is product and product management, that is the only way to drive a consumer internet company forward is from the product point of view. I kind of always talk about people used to try to put the Yahoo CEOs on the spot and ask them, "Are you a media company or are you a tech company?" The answer is neither. It's a product company. Some of those products have media. All of them are built with technology. Email is a product. Fantasy sports is a product, right? Stock charts are a product. This is not just content. We also do content.
Mm-hmm.
From every vertical that we're in, we're gonna drive forward with world-class product management and creativity and, you know, modern abilities to understand how to drive traffic. I always say, you know, this is the worst our products are ever gonna be. This is the least amount of traffic we're ever gonna have. The interesting thing and why I think that Apollo was so smart to buy the company and why I decided to drop what I was doing and come lead this company, is just, you know, we are already a top five internet company. You know, the other ones have all reached $1 trillion of value, and this company was bought for about $5 billion.
There's amazing upside to everything that we're doing here. I think, you know, our team is waking up every day to drive that value forward.
Yeah, definitely. Next topic, top of mind for many people, and I know both of you must have very strong opinions on the topic, so ChatGPT. Can you both speak to ChatGPT a little about some of the?
You can't have a fireside discussion without, you know...
Yes.
...in 2023 Q1 without a proper ChatGPT moment in time. I can start. One, I'll just say that since GPT was launched, you know, we lost two hours a day of our COO, who loves talking to machines. He, you know, we miss you, come back to us humans. I'll say a few things. One, I think it's fascinating to see that in action. In many ways, it's a cultural exercise because my mom can now talk to an AI and actually see what it is like. She used AI all the time in her car on tv and all those things, now it has a face, We've all read maybe The New York Times article about it.
There's a cultural exercise of making AI more available, accessible, understood by people. I think it will make people more productive in different jobs, maybe in all jobs. You know, something in what you do could be maybe improved with ChatGPT or a GPT-type technology. I think for a company like us, you know, I spoke about we announced a partnership whereby advertisers can get suggested titles and creatives. We have this very successful internal creative studio only meant for the top advertisers. We have 15,000 advertisers. The top of the market uses that creative studio, and it's very successful 'cause they share best practices and things. Maybe now we can scale that. I see upside. I'm not sure it will kill search, I am curious what, you know...
Jim, also known was, you know, was quoted as the godfather of search because he went beyond back in the day the 10 blue links, and then Ask Jeeves. There's a bunch of things you did there, but one of them was kind of GPT-like.
Don't tell me I was old. I ran Ask Jeeves.
No, no. It was kind of GPT-like, you know. Kind of like, you know, you can ask a question and actually get an answer versus just, you know, links that you have to follow. Then you also changed the visuals and all those things. Curious if you think it's gonna kill search. You don't have to say that, but curious what you think about GPT.
I don't think it's gonna kill search. I mean, I think, that, you know. Again, I ran Ask Jeeves for, as head of product and then CEO for about seven years. That's how I wound up working for Barry Diller at IAC. We sold to them. It was an amazing thing. We, we came in at a time when, you know, search was already going to Google. It had already become Google. What we found is there are always other ways around the mountain. When I look at ChatGPT, you know, I think, yes, there's a percentage of searches that this applies to. It may be 5%-10% if you think about existing searches, and then you may think it could add to search by, you know, creating new kinds of searches.
Questions generally were about 10%. Wikipedia might be, you know, type searches might be 3%-5%. You know, you're starting there. I think the more interesting thing. Remember, AI's been around for a long time.
Right.
It's in all kinds of products that you already use. This is just one application that kind of set people's brains on fire, which I think has been good for Silicon Valley. I think it's been, especially in the current market environment, it's been an interesting way to capture people's imagination. I look at it as something that can add value to all the verticals that we play in, finance and sports and news and others. It's not just a search application. If you look at, you know, I think I read that half of the Y Combinator companies are going after this space with large.
Wow.
language models. You know, so many interesting things are gonna come out of here. Some are direct ChatGPT competitors, and some are doing totally different things with the technology. Again, I think Monica and I are gonna be aggressive and think about how we bring some of those technologies into Yahoo. No, I don't think it's gonna turn everything upside down.
That was my question.
Yeah.
I was curious what you think. Yeah, we're on the same page.
Yeah.
Awesome. Last question. What is next for Taboola? What's next for Yahoo? What are your thoughts on what's next for the advertising industry?
Julie?
I think, you know, the biggest buckets or the biggest trends in the advertising industry, or at least as it relates to us that we're spending time on, one is privacy. We spoke about that. I think that will change consumer behavior. You know, Twitter is about to charge consumers to get two-step authentication, right? Like, the whole idea of privacy and security, I think, is gonna get a whole new phase, and that will affect publishers, companies like Taboola, advertisers. Everyone will get a new view of that, kind of, you know, new period we're embarking. The second thing is e-commerce. We just launched turnkey solution to help publishers, you know, get even more content in e-commerce and financial services and things. I think that will be big. Lastly, you know, Jim talked about GPT kind of affecting everything.
I agree. I think AI and GPT-like technologies will be. My hope is that culturally we'll accept it more than we're used to.
Mm-hmm.
I still think it's been a source of fear to many different types of organizations. If you try to convince, you know, many publishers to make their homepage personalized with AI, the initial reaction a lot of times is, "Stay away from my homepage." Is there a different future? I think that AI and GPT as it relates to consumers now liking it and interacting with it might affect our industry, you know, more.
Yeah, look, for Yahoo, we're in a unique position, you know. The market's been up and down but, you know, having come back out on our own now as a private company with a very strong balance sheet, we're absolutely thinking about the medium and long term and building this company into the juggernaut it can be for the next 30 years. My view is internal right now. It's on continuing to build out our team, continuing to build out our products.
You know, again, our, we have a huge amount of upside ahead of us, and I do think that from a revenue and EBITDA perspective, and again as a shareholder, but just understanding how that can really help Taboola, you know, we absolutely are focused on driving that upside.
Yeah. Definitely very exciting times for us and our company.
All right.
Thank you.
Appreciate you having us.
I wanna thank Monica and Jim. Thank you for joining.
Thank you so much.
Investor Day.
Thank you.
I'll invite our next presenter. Wanna come here this way. Our next session will be Eldad Maniv, President and COO. Many investors since we announced the partnership and over the last few days kinda asked us to go one level down and just better understand what is it that we're working on, how is the integration gonna play out, what should we expect, will we update investors every quarter kind of on our progress? My hope is that you'll get a better view of that from Eldad. You know, we put the best person on the job to make Yahoo successful, and that is Eldad and team. Eldad, come on stage.
Good morning, everyone. I'm going to talk about the integration. Jim and Adam set interesting expectations for us. What I want to talk about is how we do this integration, dive a bit deeper, hopefully not too deep. I'll start with Adam loves to speak about rockets and rocket ships, and my background is physics. I ran a large-scale aerospace project, use that analogy because it's an interesting one. When you build the rocket engine, the mix of liquid hydrogen and liquid oxygen really matters, you need to balance that. Getting the most out of that engine is how you actually mix and balance that. This is what we're talking about here. The mix between the supply and the demand is crucial for the success here. Yahoo is a huge publisher. It's a publisher.
It's the fifth largest web presence in the U.S. It's a publishers. We've integrated thousands of publishers. Yahoo also represents thousands of advertisers. We, as Taboola, implemented and onboarded thousands of publishers, thousands of advertisers. Really, Yahoo is doing both supply and demand at the same time. We actually have experience doing that as well. When we start a new market, like in a new country, the important part is to take the supply, take the demand, and gradually increase both, doing this in a balanced way. Unlike starting a new market, what we're talking about here is really not starting from zero. We're talking about thousands of clients, advertisers. We're talking about thousands of placements from a supply perspective. What we really need to do is not migrate a publisher or an advertiser, is migrate a full ecosystem.
We need to do this swiftly but very carefully because we don't want to lose the value, and we want to do this in a balanced approach. The integration really has some broad impacts and what I want to talk is about the collection of projects. This is really a collection of projects that includes tech, advertisers, supply and people. And each one of those, really each focus area here, has many smaller projects that are each mission critical to the success of this. To enable a tech solution here, a tech connection, we need to look at the Yahoo side and see what features are there and create the feature parity so our advertisers can actually get the value that they were getting. We need format parity. They're using different types of formats. Today they're targeting using certain data.
We need the data access to do that. We need to provide the right level of reporting. We need all of that so these advertisers can continue to run their campaigns and continue to do those successfully. We need them to migrate to a new platform. We need the policy. Every advertiser and every publisher have a certain policy. We need that to be aligned. The bottom line, these advertisers need to hit their performance goals. That's really critical, and each one of those, as I said, is a project. On the supply side, I mentioned Yahoo is one big publisher, but it's thousands of different placements, thousands of them.
To do that migration, we need to optimize, we need to implement the right UI, and we need to provide the right reporting and insights because without that, you can't really optimize anything. To do this, really what we're saying is we're going to double the size of our business, as you heard earlier, and we're going to gain significant efficiencies. To do that, we'll need to staff the right people. We need the sales and account managers to manage this business. We need the support staff, and I'll talk about that later. We also need the operational support to do that. Really to understand how all of this will work better, I want to take you into how we approach this integration. Let's start with the following. If we look at Yahoo Native, this is Yahoo Native.
Yahoo is a very impressive platform. It's a business that's been in operation for 10 years and more. Thousands of advertisers buy from Yahoo, thousands of them. Some of them buy omni-channel, multi, advertising types. They buy search, display, native. Some of them buy native only. The way they buy, the ones that buy omni-channel, that buy multiple channels, buy through the Yahoo DSP and through that buy forward. The ones that buy native only, some of them buy through a DSP and some buy directly through an API.
All of those then flow into a recommendation engine today, accessing data, unique data that Yahoo has through a serving platform and onto the Yahoo supply, that I mentioned, which again, is thousands of placements that need to be there. Really what we need to do here is look at all of this, see the big value that's running through this. At the same time, what we want to look at, this is Taboola. Taboola today has thousands of advertisers. Those advertisers buy through the Taboola Ads Console. We use our proprietary data, a recommendation engine that Adam mentioned is the algorithm, and this is all used to serve into the open web supply, which is thousands of publishers. When we look at that now, it's no surprise to see that there's overlap.
There are advertisers that today buy native from Yahoo and appear on the Yahoo sites, but they also, at the same time, buy from Taboola and appear on the open web on other publisher sites. Some of these buy through the DSP, as I mentioned. Some of those buy through native. If we look at the ones that buy omni-channel, what we want them to do is to buy through the Yahoo DSP on the Yahoo side and also get here. The ones that buy native need to go, again, to both sides. Let's look a bit into more detail on that, what that implies. Our integration, and this is the first concept of integration from a more technical perspective, is designed to methodically route balanced allocations of supply and demand simultaneously.
We want to start with a small portion of traffic to flow through Taboola and increase that over time. What does that mean? Let's follow some of the paths here. Let's take an omni-channel advertiser today that buys from Yahoo. What we'll want to do is they buy through the DSP. We will want to take a small portion of traffic, route it through here, bring it to Taboola, to the recommendation engine of Taboola, but also allow the data access that that advertiser has today, and through that, throw it back to the serving and serve it on the Yahoo supply. Similarly, for a native-only advertiser, which buys either through the DSP or through the API, again, flow it through this, take a portion of that traffic, flow it here, and then back into the Yahoo supply. What that allows us is this lever here.
What we want to do really is to be able to turn that lever. Start with no traffic and then grow the amount of traffic that flows through here all the way until all traffic flows through here. That's really the concept of integration. To enable this and to implement this, there are a few things that need to happen. On the advertiser side, first of all, they need the right features. They're using features today, they need those same features. They need targeting parity. They're trying to target very specific users through specific datasets. They need to be able to do that. From a supply perspective, we need to enforce the right policy for the advertising. Again, we need feature parity here, the specific placements.
We need to implement the right UI on the Yahoo placement, and of course, we need reporting to be able to do that. All of that leads to a lot of technology projects that need to happen. The obvious ones which I mentioned is data-to-data, server-to-server connection, data access from the Yahoo side to Taboola, targeting and feature parity, so developing all of these targeting concepts, all of those features that are there. We need content moderation because the policies are similar on native between Yahoo and Taboola, but slightly different. We need to implement that into our artificial intelligence and consoles. Algorithms. Yahoo has their own algorithm today. We have a different algorithm. We need to make sure we optimize such that, again, we provide the clients the right recommendations.
Nothing works without building a solid A/B testing infrastructure, because on the web, you always think you know what happens, but you always need to A/B test this. Once we built all of this initial connection, really what we're heading to is the end state. What does this end state look like? If we look here, there's the Yahoo omni-channel advertisers. They will continue forever to work through the Yahoo DSP. They buy multi-channel. One of those channels is native. That native channel needs to flow into the Taboola platform with the right data access, as I mentioned, to the recommendation engine, and then serve both on Yahoo supply but also on the open web supply, as Jim and Adam mentioned earlier. The native-only advertisers that were here now are migrated.
All of these native-only advertisers are now Taboola advertisers and work through the Taboola flow and again, be able to access Yahoo supply and to be able to access the open web supply. That is the end state. Beyond that, there is also the Yahoo DSP being connected to Taboola and driving video and display into the network. One of the most important things is this persistent data connection that allows the targeting that I mentioned earlier. For that end state, there are again projects that need to happen. On the advertiser side, we need to migrate customers. All those native-only advertisers need to move from Yahoo into Taboola. They need to be onboarded by Taboola. That's quite a bit of effort to do that. As they do so, they need their campaign history. They need the right level of reporting.
All of that happens. They need to be able to access the open web supply that I showed and not just Yahoo. We also need to continuously support, since we are the native channel for Yahoo, we need to support the omni-channel sales of Yahoo with the right service to their sales and account management team, and obviously support. On the supply side, Taboola's technology is with code on site. The last aspect here requires client-side integration, which is what the technical aspect that needs to happen, which drives all of the value of the data that we mentioned. With this, really what we've talked about is what needs to get done. That is at a high level, what needs to get done. Let's now address of who will do it.
As I said, we're about to double our business, that gains significant efficiencies that are gained. It also requires that we will grow our team. What do we need to grow? On the sales and account management, we need to be able to service all these clients that are migrating and to serve the Yahoo omni-channel side. That is staffing that needs to happen. It needs to happen mostly ahead of those clients flowing in. We need to operate this, we need to build these customers, invoice them, we need to collect, we need to operate that. A customer support. We need to support all of these clients. We obviously also need to support Yahoo as well.
From a technology perspective, I mentioned feature parity, I mentioned targeting parity, I mentioned multiple other aspects of data access, server-to-server connection. Someone needs to develop all of this, so this is staffing up our engineering team that needs to do that. Of course, the algorithm part, again, to match everything that is available on Yahoo over the last decade, there's work to be done here. From a supply perspective, 5,000+ placements. Someone needs to actually create those placements on the Taboola side, so that is our professional services team that needs to implement that. Content moderation. We have a beyond artificial intelligence, we also have users, people that are reviewing content. They will now need to do the same for the Yahoo demand to serve on the Yahoo supply. There's technical support for UI. So this is really the who.
With that, I'll go into the when everything happens. We looked at this project integration effort, and we've devised four unique stages here. Phase zero, right here, is the planning stage. We're nearing the end of that stage. This is everything that I mentioned from a technology perspective, from a sales planning, how do we onboard clients, what do we move where? This is the entire planning session of what happens throughout this integration project. Once we're done with that, we get started with the build and test. All the functionality that needs to be built, all the integrations, happen at this stage. What we start doing is start testing the pipes, putting some water into the pipes, not a material revenue, but trying to see that things actually connect. The data connects, the advertisers can actually flow through this.
This all happens here. Once that happens, this is really the point when we start to turn the dial. This is phase II. Once in phase II, we start turning the dial of starting to send traffic, as I said, from both sides, supply and demand simultaneously, and start increasing by pulling that lever further and further, turning that dial. We expect this to start in the second half of 2023, as we mentioned. Once we're done with that and we got to the 100%, we're at the stage where we're migrating the advertisers to the Taboola network, the ones that are not omni-channel, but native only. We're doing the client-side integration, so code on site on the out pages. Then the optimizations that need to happen here.
Basic optimizations, which Adam mentioned, UI optimizations, e-commerce, header bidding, et cetera, all happen from this point and beyond. We assume that this phase ends, phase II ends, and phase III starts by mid-2024 when all of the traffic has been transitioned. Really to summarize this, we heard from Adam and Jim that the success of this partnership is really a top priority for both companies. I can say that I'm personally chairing the steering committee for this integration effort. We've put the most talented people from both sides as leaders of the tech tracks, of the sales track, of the people track on this, and we're making progress. The teams are really working shoulder to shoulder.
It's a project with a lot of components, each of those we've done before, but this is a big set of these projects that we do. We know exactly what we need to do. There's a lot of work ahead of us, but we're going to get there, and we're very confident when doing so. With that, I'll ask Steve to come on board.
Thank you, Eldad. For those of you who don't know me, I'm Steve Walker. I'm the CFO. You may not recognize me because Adam convinced me that I didn't have to wear a sport coat today, even at an event like this. That's why I'm in a casual shirt. My job here today is to take kind of what you've heard today and summarize a bit, and also translate it into expectations for when does the revenue start and how do you think about it. Let me do that. Eldad talked to you about these four phases, and what I wanna do is now translate these four phases into when do costs start, when do revenue start, just so you get a sense. First in phase 0, that's where we are today.
We're getting towards the end of phase zero. We'll soon move out of this, for now, there's obviously no revenue, nothing has been transitioned, there's nothing that started, really, there's minimal costs. We're using our existing resources. We haven't hired people to really start this yet, very little cost. Soon, we'll move into phase I. With phase I now, as Eldad described, we're starting to build the connectivity between the platforms so we can start to transition advertisers. We still won't have revenue. Technically, we'll probably have some very small test revenue in there somewhere, but it's very small, so you can consider it no revenue in this phase. We'll start ramping up the cost.
We'll start hiring, and we've already put offers out now for mostly R&D staff, which will be the people who are gonna start building that functionality that Eldad just talked about that helps us then migrate the advertisers in a staged way. In phase II, we'll start ramping the revenue. This is when the pipes are built, everything we believe is working, and we're gonna start transitioning the revenue over. As Eldad said, we need to do it in a balanced way. You don't want too much, did you use the liquid oxygen, liquid hydrogen reference? I didn't listen. You don't want too much of either. You need to be balanced. You need to bring them both over in balance. That's when the revenue will start ramping, and the cost will continue hiring.
In this stage, we'll start hiring more of the sales and account management people that are necessary to help manage the advertiser relationships that we're bringing over. Cost continue to ramp, lot more on the sales side of things, sales and account management. In the phase III, we've now reached the full peak state in terms of full run rate for the deal, and from there, the revenue will continue to grow, we believe, as we continue to optimize and take advantage of some of the growth opportunities and everything that Adam talked about earlier. Our cost will, at that point, hit a steady state. From there, the cost will, first of all, the engineers that were on the project will probably be able to move off.
We'll be able to reallocate them to other things, the account management sales professional services, the other things that support the revenue, will grow at a slower pace than the revenue, we believe. We believe we'll gain scale advantages at that point. If you're visual instead of table-oriented, this is one possible depiction of how the revenue could look. Obviously, it's not to scale, it's we're kind of guesstimating here, very little, 0 revenue in phase 0 and II. In phase II, we'll see a ramp. In phase III, we expect the revenue to kinda continue to grow at a steady rate. The hardest part for us to predict today is what does the shape of that curve in phase II look like?
Here I've depicted it as kind of a hockey stick, where it starts slow and it grows fast at the end, but it could be more of a straight line. You know, we could find that we just need to be balanced and do it at a steady state, so it could look more like a straight line. We could find that things are working really well, and we turn up the spigot really fast at the beginning, so it could ramp very, very quickly at the beginning. That's the probably biggest unknown for us today, and that's what will determine how much revenue we get in 2023 and early 2024. That's the, that's the part we'll learn as we get into this.
On the cost side, Eldad mentioned the different buckets of costs that we have, and I just wanted to give you a sense of where we're really spending money to support the deal. We'll have a publisher account management team that's very small. We'll obviously need some G&A resources like billing people, collections people to support the revenue. That's very small. The more significant costs are on the right-hand side there. Our advertising sales and account management people, that is a significant cost. We need people to support the advertisers to make sure they have a good experience, that they're getting what they need, that they get the performance that they need, as Eldad talked about. That's a significant cost, and that'll be basically permanent, that we'll always have people supporting our advertiser revenue. Customer support is another relatively significant cost.
It'll be a big team that will support both the advertising side and the publisher side, supporting the placements, making sure everything's working properly, you know, their first level, second level, third level technical support when things go wrong. That's a permanent cost as well. Both of those, like I said, will kind of ramp to a certain level, and then we expect it to grow slower than the revenue from there. Finally, there's the technical team, which as I mentioned, it's a significant cost now, but it'll probably be a significant cost five to six quarters, and then we think we can transition those people off, because this will become part of our core. There's nothing about the Yahoo supply in the long term that's that different that we can't support it with the same core functionality as the rest of our business.
Again, visually, what that looks like is something like this. We're exiting phase zero now. We'll start ramping that cost, kind of hiring people, especially the technical staff early on. It'll continue to ramp into phase III. At that point, we'll be able to move some of the technical people at some point back to other projects, so that cost will come off, and then it'll grow at a pace probably slower than the revenue. Obviously, the area under the cost here is the $30 million of investment that is in 2023 that we're putting into the project this year to make sure we build what we need to and that everything works. That's the $30 million of investment, but obviously, the ROI on this is significant.
As we said when we announced the deal, we still expect $1 billion of revenue, $150 million of EBITDA, and $80 million of cash flow on an annualized basis when we hit kind of the full ramp. We believe we can grow it from there, and Adam has talked about doubling the native revenue from Yahoo. We believe it'll grow, but that's our steady state when we get everything transitioned over. Obviously, that's financially transformative for us, and we're excited about that. I also wanna talk about the strategic value of the deal because there are aspects of the deal that go beyond just the financials that we're excited about.
I wanna go back to, for those of you who've been with us this long, I wanna go back to our Investor Day in March. At that time, we talked about the fact that, you know, we have 40% ex-TAC margins at Taboola. That's roughly double what you'll find in our space for most other companies. How do we do that? There's gotta be a reason that you're able to do that. We're in a competitive market space. It's not like you can command excess margins for no reason. You have to have some sort of significant competitive advantage. What we explained at the time is we believe that there are five factors that drive our competitive advantage.
I'm not gonna read them all to you now, but I do wanna walk through each of those and tell you how Yahoo actually enhances that competitive advantage and why we're so excited about the value of this deal to driving our competitiveness in the open web. The first one that we talked about at the time was our scale, and Adam actually talked about this earlier, is our scale advantage. Scale in our space basically drives a network effect. The more scale you have, the higher your yields go, the easier it is to win publishers and win publishers more profitably. Yahoo is a quantum leap forward in terms of our scale, 60%-70% more scale than we've had. That's a huge advantage for us because it'll make us even more competitive in the open web.
We also talked at the Investor Day about the second advantage that we have is that we drive more yield than our competition. Part of that is that scale advantage that we talked about, and there's really three things that drive yield in our space. You have to have a high number of advertisers, you have to have the best data, and you've got to have great technology. Yahoo significantly enhances two of those three. We'll have significantly more data because we'll have a lot more data from Yahoo and all of their users. We also will have significantly more advertisers 'cause we're bringing advertisers over with this deal, and the combination of more advertisers and more data should help us drive up yield across our network, not just for Yahoo.
We'll also do it for Yahoo, by the way. Across our whole network, this will be beneficial. The fourth thing we talked about in terms of what drives our competitive advantage is that we're not dependent on third-party cookies. For a lot of people in the ad tech space, that's not true. We're heavily contextually oriented. What Yahoo does for us in this regard is gives us significantly more contextual data and much deeper data on a lot of users. Yahoo reaches 84% of the U.S. internet population every month, and they've got highly engaged users. I'm a Yahoo user. I go to Yahoo Finance daily. Actually, my homepage is Yahoo, so Jim left. Darn it. I could've-
Very.
Hey, still use you as a homepage. And, you know, I'm in Yahoo Sports. I use Rivals. Like, I'm a huge Yahoo user. They see me 20 times a day, and that's typical of the Yahoo user base. That level of contextual data really gives us a huge advantage as third-party cookies are deprecated, and it really becomes a contextual world. This advantage gets even more significant with Yahoo. The fourth thing we talked about at our Investor Day in terms of our advantage was our platform advantage. We provide a lot of services to publishers that our competitors don't even think of providing. For instance, Newsroom is a product for the editorial staffs that helps them figure out what to write, what their readers are reading about elsewhere on the web.
Homepage For You, Adam talked about earlier, that's a personalization technology for publishers to personalize their homepage with AI. Subscription Driving, we have tools that help publishers drive subscriptions on their sites. Taboola News is a product that basically it's Apple News but for Android devices, we drive traffic to publisher sites. What the common thread is on all four of those platform services that we provide is it takes data. It takes unique data to provide those services. What Yahoo does for us in this regard is, again, because of the depth of data that we'll have on users, every one of those services will become that much more valuable. Newsroom will be an even better tool. Homepage For You will get better. Our platform advantage gets even more significant with this deal.
Then fifth and certainly not last, we talked at the time about how we've gone into e-commerce. We've made a big bet that this is part of the future of monetizing the open web. Interestingly, Yahoo is Connexity's biggest customer, so we believe there's a ton of opportunities for us to work together to really drive our e-commerce advantage that we have and make it even more significant. Bottom line, all five of the competitive advantages that we talked about back in March get more, again, enhanced by this partnership. We're excited about the financial part of the deal and the financials that come with it. We're even more excited in some ways about these strategic advantages and how strong we get with this deal.
With that, let me invite Adam and Eldad back up, and Rick's gonna help us moderate. We're gonna have a little bit of a Q&A session here. Thank you.
You can just raise your hand.
Jason.
Cool. Thank you. Jason Helfstein with Oppenheimer. How are you guys? Thanks for doing this. I'll just ask one. Can you bridge the $1 billion? What was that at, you know, what were those impressions garnering at Yahoo, you know, previously, and, like, how do you bridge that? Yeah.
We haven't spoken specifically about Yahoo financials, but what we have said is that $1 billion includes an assumed uplift on our part of driving higher revenue for Yahoo. We haven't disclosed exactly how much, but it does assume some uplift, and it assumes some uplift across our network from the kind of yield advantage that we think we'll have with this. It's their revenue with an uplift plus some uplift on our, on our network. It doesn't include the growth initiatives that Adam talked about, like header bidding or, you know, some of the e-commerce things we think we can do together. It's really their supply with an uplift and then some yield uplift on our network.
Can you, like, broadly quantify it? Is it 20% or so?
Most of it's, yeah, most of it's their revenue with an uplift. That's most of it. The smaller part is the.
Can you say how much the uplift is?
I don't think we've disclosed that. I guess, you know, let's just say we're confident that we can get a significant uplift. We've assumed something conservative for this.
Laura.
Eldad, thank you for coming. Super helpful to have your, what can go wrong? How bad can it be? You've done thousands of these. When it goes badly, what happens and how long does it take, and how much extra does it cost?
I think we built buffers into the plan. Each of the projects is very, very doable. The complexity is that it's a lot of projects all happening at the same time. I think, really the right project management would mean small delays if something goes wrong, but nothing here breaks. There's nothing that breaks. I can say that this week we have about 40 people, tech teams of both sides doing an off-site together and have really made progress. The more we dive into this, the more clarity we're getting into exactly what needs to be done, and we think it's very doable.
Okay. Then for Adam, and just to follow up. We cut costs, you cut costs last year, and now we're gonna add a bunch of people for this. Normally, you do ad supply, not of Yahoo's size, but normally you're adding, I don't know, 12 to 50 publishers a year. I guess my question is, you already had staff that was able to do... Presumably, please confirm for me that you're not gonna go out and try to hire more and kill them by adding more publishers that we're done here for, like, 12 months. I'm just wondering why that we already had an infrastructure to onboard 12 to 50 publishers, this is just a super big one. I guess I just wanna understand, you know, I guess I just wanna understand the $30 million a little bit better.
I can start, then Stephen Walker can chime in. First of all, in this case, the $30 million is a combination of people, infrastructure. It's not just the team. There's also an infrastructure, investment that really go into play. If you think about it's not just a publisher. You have thousands of advertisers that will require account management. You know, we have professional services for thousands of new placements that we want to optimize and create. This is thousands of clients. You wanna sell more into this. Just sales and account management is a bigger portion of the investment on the people side. Then you have the infrastructure that you want to make sure we're prepared for. This is a bit...
It's not a publish, it's not a publisher deal, in the sense that it's many publishers, you know, hundreds of publishers, really, and then thousands of advertisers in one. It's a whole ecosystem, like Eldad said, we need to move into Taboola. The upside is so big, you wanna make sure you do it correctly. By the way, in tandem, we wanna get as many publishers as we want. To be clear, if you're a publisher listening to this, we wanna work with you. Whoever you may be, we call it liberation. Whoever you may be working with right now, it's okay. We do think there's a bigger upside with us.
Last year, 2022, which was a, you know, macroeconomics challenging year, it was our second-best year winning publishers, and I hope this year will be better. You know, we don't guide for better because that was a great year. To be clear, if you wanna do this for the longest time, winning publishers' trust for 3, 5, 10 years is still very, very important to us and forever will be. We don't intend to stop selling to publishers either.
Let me just add one thing to that. In a typical year, our new publisher growth would be on the order of, you know, 10% of our base. If we're at $1.4 billion of revenue, we would normally say new publishers might bring in a good advertising market, another $140 million of gross revenue, 10%. This is $1 billion. You can't support that without bringing over the advertisers. Normally, we bring on a new publisher, and yes, we, you know, we have enough advertising excess demand that you bring it on and it kinda fills that supply pretty easily. That's because usually we're bringing on 10% in a given year.
This is so huge that we have to bring over the advertisers with it, or else we would kind of. Our advertisers won't scale up enough to fill it. We won't get the uplift that we need to get for Yahoo and for ourselves. That's the other thing that's unique about this, is it's, you know, 70% increase in revenue and volume, not 10%. By the way, the 10% usually happens over 12 months. This will happen over 6 months, so it's, you know, it's even significant more, significantly more.
Andrew Boone,JMP .
Thanks for putting this thing on. Adam, I wanted to ask about the doubling of native ad revenue, right? That clearly is a goal, but what has to happen for that to come to fruition and for you guys to execute on that opportunity for you to double that billion?
I mean, the most obvious thing that will happen, I hope on a daily basis throughout the relationship is A/B testing different user experiences on Yahoo together with the Yahoo team. They have a great, very strong team running the consumer business and, you know, with other, I think a lot of inspiration to kind of innovate different formats and different experiences. In many ways, Yahoo hasn't changed in a long time. I think on that one, my hope is that this is a daily improvement and over time, something we can even budget for and rely on as it relates to user experiences, new placements, and things that will drive user experience growth.
Advertiser success and RPM yield growth, if you think about a full page, revenue per thousand impressions, I think that can grow significantly over time. That's one thing that I hope will become just the way we do business. You have bigger things, header bidding, which, like I mentioned, we're seeing, you know, very encouraging early signs on smaller publishers where we generate millions of dollars a year per publisher. If this would scale to Yahoo, that would be big. It wouldn't be as big as Yahoo, but it would be potentially, you know, big. The third one is e-commerce. There's already an existing business, there's already working relationship between the teams before even Taboola acquired Connexity. That now with the deeper relationship and equity partnership, can grow more.
I would say those three things are, you know, I think could be material. The last one is the contextual segment, segments which, you know, which, we'll see how the market reacts to those. My guess is that with the bigger scale we have, we can create new contextual segments, make it available for advertisers on Yahoo in the network. My hope is that we'll see that it creates better return on spend. Those are the big buckets. Some of them are daily, some of them will be investments that we'll need to see if they mature.
Steve, I wanted to get further clarity, and this is really a follow-up to Laura's question, but it sounds like you guys will have excess capacity as you guys roll through the phases and kind of complete the integration. Right? Just help me understand that. Is that you guys are literally planning a RIF, like in, you know, two years?
On the tech side, you're talking about?
Yeah, exactly.
Yeah.
What are you guys gonna do with the excess engineering capacity?
I think, I mean, we have plenty of projects that we that we have need for people on, and I think if anything this we're shifting resources away from some of those to help with Yahoo in addition to the people we'll hire. No, no plans to actually cut, but the actual project cost for Yahoo will shift to other things, the people who are on that project. No RIF, just shifting people to other priorities.
John Blackledge with Cowen or is it now TD Cowen?
Yeah. Congratulations.
Thank you. Adam, you said that your value-added tools like Newsroom, Homepage For You, and Taboola News are still in the startup phase, still in early innings in terms of reaching their full potential. Could you speak broadly about how the incremental data and relationships from the Yahoo integration can help jumpstart these tools, maybe move them closer to maturity over time? How are you thinking about this strategically? I have a follow-up for Steve.
Yeah. You know, each one of them kind of does contribution to different things. As an example, on the Homepage For You, Homepage For You is driven by AI and data mainly. That is a reminder that helps publishers kind of create this personalized experience on the homepage and to increase the pages per session, so it makes the pie bigger. We have publishers, McClatchy was in our last year Investor Day, if you recall, and they spoke about, McClatchy, a variety of publishers, having Homepage For You, which is an AI service that now McClatchy is bigger. With more data, this can make this supercharge Homepage For You and the editorial technology.
We have about 2,000 writers and editors using Newsroom, which helps them know that people who read about this on their site, when they leave their site, what else do they do? Now with the Yahoo partnership, we'll see the average American so many more times during the day. It will make us smarter and better to create this correlation between people who do this also do that. People who came to my site, what do they do when they leave me? We're seeing more and more editorial teams rely on Taboola to make decisions, what content do they should write, what content drives subscription, and all those decisions will be just stronger with Newsroom. So those are at least, you know, two obvious ones. I will say that the number one priority for Taboola is performance advertising.
Because again, I think that this has the biggest upside for investors. We can double and triple the yield over time by making more advertisers and existing advertisers succeed with Taboola even more. With the Yahoo partnership and the contextual data we'll get and the quality of supply, I hope that advertisers will see, you know, even more success with us. I'm curious if Eldad and Steve, anything to add?
I think.
I would just add that Steve said that we're treating this very lightly, but if you take the advertiser base today of Yahoo that spend only on Yahoo, the advertiser base on Taboola that spend only on Taboola, each of those could now spend on all platforms. When Steve talked about incremental yield, really that is opening up the ability for those advertisers to access a supply in a much greater way. That's another way that over time we believe will increase significantly.
A quick follow-up for Steve. Can you help us size the potential revenue benefit to these tools that Taboola could see coming out of the other side of this integration? I understand it's still a year and a half away, but for example, is there a concrete incremental revenue contribution you expect to see at Taboola News, which I think is already generating more than $50 million annually? Finally, maybe just on top of that is how big do you expect Taboola News to be from a revenue perspective in, say, 12 to 18 months?
Yeah. We haven't started guiding for Taboola News specifically. I think what we've said is that we still believe it's a $100 million-plus business. We've said that it was a $50 million-plus business in 2022. We're still seeing triple-digit growth rates there. That kind of gives you some parameters to think about it. I think it's, you know, it's a big business. I think what, you know, Yahoo does for Taboola News specifically is it gives it a when part of the challenge of Taboola News is someone picks up their cell phone, they swipe right, what do you show them? Well, we're gonna be a lot better at knowing what to show them. That creates engagement with the user.
Engagement with the user, one, will drive more revenue for us, but also it makes the Samsungs of the world look at that and go, "Wow, you do a really good job with this," and it'll help us bring in OEM relationships and expand those relationships and do more with them. You know, the hard part is the biggest way that Taboola News grows is expand those OEM relationships, and this will help make the experience for the user better, which should help with that, but I don't know how fast that happens necessarily.
Stephen Ju, Credit Suisse.
Thank you. Thank you for hosting these guys, and Alda, nice to see you in person. Touching on what you were talking about earlier, I was wondering if you had a chance to do an audit to see how much of the overlap there may be between Yahoo advertisers and Taboola advertisers, so we can start thinking about the potential benefit longer term to Taboola as it stands now. For Steve, in terms of the guidance parameters there, why is there such a large disconnect between EBITDA and free cash flow? Thanks.
I'll start. We don't have exact numbers of the, of the, of the overlap. We're actually going through that and analyzing that. It's a, it's a pretty tedious effort because even understanding what the same company is, which in different platforms has slightly different names. We're going through this. What we're really doing is going through a mix of what companies are spending on both platforms, but also what type of feature set they're using. We can look at the integration phase and see the companies using these feature sets which are compatible today can move earlier, whereas some that require more feature parity would move later. There is significant, from a revenue perspective, there is significant overlap.
In terms of the free cash flow EBITDA gap, there are some things that will drive that gap. We will have CapEx be to support this much revenue, we have to bring in, we have to buy servers and support that. There's taxes, which, you know, frankly, a lot of this is U.S.-based, so we may have higher U.S. taxes. There's some conservatism built in there too, to be honest with you, that, you know, we just need to see how it plays out before we'll know what the exact conversion ratio is on the cash. You know, most companies don't guide the cash flow because it's very hard to predict, I was trying to be conservative on that as well. Was there another part of the financial question or did I cover it?
No.
Okay.
Thanks for taking the questions. Is there any way to size the Yahoo relationship with Connexity currently? How does that inform just your view on the uplift in yields?
I don't think we don't usually want to get into specific, you know, revenue relationships with publishers. Like, we usually don't talk about the exact size of a publisher or anything. I don't think we necessarily want to get into that. I think what we could talk about though is the opportunity between Connexity and Yahoo, which they're already working on various ideas of how we use Connexity's demand and its unique e-commerce demand to drive more revenue for Yahoo. I don't know if you do want to talk at all about some of the growth opportunities there.
Yes, I don't know if it answers any financials though, but if you wanna mention what can we work together on. There's Yahoo itself has a big search, you know, for product business as well as e-commerce business on the content front. Those can go greater. It can be people can shop more on Yahoo, and there can be more content on Yahoo that drives conversion to retailers. These are kind of things that we're already seeing on the rest of the Taboola right now, of how publishers basically participate in e-commerce. I think it can be bigger, because, you know, still we're early kind of innings in the e-commerce in general in the open web. That if you look at just the announcement of Turnkey and TIME, right?
Just automation of using data to create content at a larger scale in different verticals, financial services and commerce and healthcare and travel over time, different verticals. I think there's a lot there that can increase the portion of traffic that has high intent that retailers wanna be part of. It's hard to, you know, put a number on that, but it's a huge industry and Yahoo is big, and Connexity is sizable. I do think that it has a big opportunity, you know, in terms of scale, but we haven't kind of given specific numbers. It's too early to say too, you know.
Fair enough. Thank you.
Thank you for the question. Just to go down into the cost side a little bit more, is there any way that you can gauge or just indicate kind of what the general amount of additional investment will be required in 2024? Is that a little hard to gauge given that some of these costs are gonna be longer term?
What we can say is, at some point in phase III, as we're ramping the revenue, the whole deal will become EBITDA positive, and the revenue will significantly outweigh the cost. The way we think about it is the $30 million is investment in 2023 because it's gonna lead to revenue later, so we're investing now to get to that revenue. In 2024, it's an EBITDA positive deal, most likely, certainly for the full year, and probably sometime very early in that. I wouldn't think in terms of incremental cost there. I would think in terms of $150 million roughly of EBITDA potential when we get fully ramped and the fact that it probably will be EBITDA positive fairly early in the year at the latest. You confused him now.
Yeah. The question about the ad yield, what have you seen historically when you've done acquisitions? Have you seen, as you have more data, the ad yields go up? You talked about how it can double and/or potentially more than that. Is that a theoretical target, or is that something realistic? Have you seen that in early testing?
Yeah. Stephen Walker and Eldad Maniv can probably talk about that. We did share some historic data about yield growth over time by investing in data and AI, how that how scale contributes to yield getting better. Eldad Maniv, Stephen Walker, do you wanna get into that?
Yeah. What we've talked about historically is that yield has historically driven 10%-15% growth for us per year. So the, again, the elements that drive yield are advertisers, data, and technology. Data is probably the biggest one that we get as we grow, you know, bring on more publishers and grow. Overall, you get more and more data. You get to see the users more often. You get to see what they're clicking on. You get to understand that somebody who's in New York on a Friday morning in, you know, Manhattan on a laptop reading CNBC, an article about green energy tends to click on car ads for whatever reason. Like, you get to get that data, and then you can use it across the network.
Somebody who's in Manhattan on a laptop in New York or in New York in the morning on a Friday, reading about green energy on USA Today, well, let's try car ads because that's what we've seen elsewhere on the network. Even if it's not the same user, not even the same site, it's a similar context. You get that context, and it drives yield ’cause you've got that data. That's what the growth in our scale does for us, is it gets more data. It's hard to separate out how much of our growth in yield, the 10%-15% per year that we get historically, is from data versus investment in the algorithms and the technology versus bringing on more advertisers ’cause that base is growing too. Advertisers, by the way, also follow the supply.
Bringing on more supply means you can get more advertisers. Adam talked about if you get to the must-buy level, then the advertisers they start with you. They say, "Well, I have to buy Taboola and Google and Facebook." Then they figure out what else they're gonna buy after that. They do follow the supply. It's hard to separate the three elements, but we've definitely seen this in our past.
I think just worth mentioning that, publishers that, on the UX optimization front, publishers that go from widgets to feed, from with video, in-feed video, to without in-feed video, from no carousel formats like you see on Instagram to with carousel, all those things drive yield growth. That's gonna be significant, tens of percents, sometimes more. Between technology and data and advertiser base and UX, all of these things play out quite significantly. There's historic data to show how every year it keeps happening.
Yeah, of course.
Hi. Good afternoon. I thought today was really useful and helpful. I, as an investor, I think Friday's call with the fact that there was no revenue for Yahoo was a little bit misunderstood. I think today was super helpful. I had three questions on that, if that's okay. First, just to confirm, it does feel like that's just a placeholder that it's 0 revenue, but you do expect some revenue based on the charts that you had there. The question for Eldad is really, you know, during your presentation, you talked about that turn of your hand, how quickly you're gonna turn on or turn off that spigot. Steve has those graphs or those curves of when that curve could happen. What's your expectation of that curve?
If you do believe that you're gonna get to a EBITDA positive number early in 2023, that means you're gonna do $30 million, $40 million, $50 million of revenue even before that, which means that you're probably, at the worst case, doing that this year. Maybe I'm being a little bit too dramatic, but it would seem to me like in your best interest to turn it on as soon as possible with the understanding that you're not ruining the long-term opportunity. I just wanna hear your thought about that chart that Stephen had and Stephen's question about the placeholder of the revenue.
I'll start with we're building the technology to actually allow us to turn that knob. What's driving turning this is all the other projects. I mentioned earlier, for example, if we look at advertisers that use specific features, if they're using a feature that today is not supported, until that feature gets built, that targeting gets built, we can't really use that traffic. We need to now map which advertisers are using which features, what targeting capabilities, and do that matrix to see what can be used into that lever at what time. We are in the final stages of that planning. We don't have that detail, we're being very careful in how we estimate what it would take. I don't know to be more optimistic than what we said.
We're going to obviously do this as quickly as possible, but while making sure that there is no risk in doing so.
On the revenue question, you know, if you, if you ask me like, you know, take a bet, are you gonna get revenue this year from Yahoo! or are you not? I would say yes. I bet on our teams. The only thing that could delay revenue fully into 2024 is if the project doesn't go well. Like, with the pipe, you know, the pipes that we connect the two systems, the dial that Eldad talked about is just not working in some way. That's what would delay the revenue. If I had to bet, yes, I'd bet we would get revenue, and frankly, it's because I'd be betting on our teams. For me, as CFO, though, I just don't have clear line of sight to it, that's why we chose not to guide to it at this time.
We do expect to update as we go through the year. We have more visibility into how things are working.
Would you guys be willing to speak to the nature of any performance guarantees that you made to Yahoo! in connection with the transaction, and, whether or not the layoffs that Yahoo! announced on the ad sales side present risk that, you know, to the execution of your plan?
You want me? We haven't disclosed any. We would never disclose any one publisher in a specific deal terms. It doesn't make sense for them or us to do so. I don't think as investors you would want us to do that. From that perspective, what we did share, though, is it's a great partnership. It's very accretive. What we did wanna give is, that's why we gave the EBITDA and free cash flow opportunity, which we think are both conservative as it relates to the $1 billion in revenue, just to give investor the idea of how great of a partnership that is to them as the shareholders of the company. Beyond that, you know, from a competitive landscape perspective, it wouldn't make sense for us to share more than that. That's on that perspective.
I don't wanna speak on behalf of Yahoo! What does that mean to them? I can tell you from a partnership perspective, it means nothing to us. We think it doesn't move, doesn't change the plan. The teams are hard at work. If anything, everyone has more focus. I think it's a net-net, not effective the partnership in any way. If anything, I wanna believe it helps us be more focused on making this successful.
We're working closely with the Yahoo! sales team, with Elizabeth, the CRO, and her team, and we're not seeing anything that is negatively impacting based on what they're doing to us.
Hey, guys, Dan Day with B. Riley Securities. You talked a lot about how adding Yahoo! sort of makes you a must-buy along with the, you know, walled gardens in terms of the open web. You sort of go from a leader in open web native advertising to kind of an 800 pound gorilla with Yahoo! Just wondering if any of the publishers out there who might use a smaller competitive have sort of come to you and agreed with your thesis and are kind of doing RFPs or, you know, something along those lines. Just wondering if inbounds from publishers using competitors have increased since the deal was announced. Thanks.
Yeah, I can take it. It happens a lot. In general, like, 2022, even before the Yahoo! partnership was an amazing year for Taboola because we've taken a long-term investment, you know, a few years back that publishers want more than just money, right? That means that if you're a head of a publisher, whether you're head of revenue, a GM, a CEO, smaller publisher, bigger publisher, you wanna work with someone that can empower everyone, product teams to drive subscription, editorial teams to get insights about their content and what drives subscription. You wanna think about the diversity of revenue. You don't wanna be just in video or just in banners. You want some e-commerce and other things.
You're thinking about all those buckets of your mission as a publisher, you're saying, "I can work with one good company," a Taboola competitor, many great companies out there, they have not invested in technology like we do. We invest more. They might get even more revenue if they're willing to make guarantees and things. With us, they get great revenue. A lot of time, we believe it's 30%-50% more than anyone else. They get technology at no cost that makes them drive audience growth, engagement growth, and revenue growth. I think regardless of Yahoo! Since Yahoo, we got a lot, I mentioned Follow. We got a lot of publisher, you know, I think asking themselves how we can be part of this new iteration of Taboola.
How does that help us get more audience? Can we get more revenue from this? What happens when advertisers of Yahoo! launch in Taboola, if you're a Taboola publisher, your revenue will go up. If you're not, it's like a marketplace, you know. If you're not, you're steady. You wanna go up. We've gotten a lot of interesting inbound emails from senior folks, many we've been in relationship for a long time. I mentioned some of our publishers who left us came back. Some were liberated to work with us for, you know, because they work with someone else, and some work with us for the first time. I do think it's only the beginning from that perspective, but we have the hard work of, you know, executing and growing in all the directions we talked about.
I do think it's gonna become irresponsible not to work with Taboola as a publisher in the future.
I think we have time for probably one more question.
All right.
Unless it's a quick one.
No, it won't be a quick one. It'll be the last one.
All right. It's for Eldad.
Let's actually let's start with my second question then. The features that you guys are building for Yahoo!, right, it seems like you guys are adding incremental products, features for advertisers. Just talk about what this means in terms of additional features that are available for everyone else on the network. Right? Then I'll just sneak in the second one. Yahoo's probably your most logged in publisher, right? Again, what does that have to do with everyone else that's on the network, right? You know, if I'm in Fantasy, you guys know my email address. What does that do for CNBC? Is that a big deal or am I overthinking that?
Maniv will start.
Yeah. Starting with what the feature set does to advertisers. The way we're looking at it right now is advertisers are using specific features. For example, a feature may be a specific format that is not supported today. What is the opportunity of that format on the network? There is opportunity. That's part of the synergies of doing this. We're not assuming a significant opportunity out of that right now. The core view is we need to support it to just migrate those advertisers into the network. Some of those features definitely have opportunity. We didn't do the work of analyzing the exact size of that opportunity on the Taboola network.
Is that an easy lift or is that something that is not really? I'm overthinking it?
Since we're still uncovering the exact feature set as part of the planning, it's not something we could have done anyhow. I think once we're done with the planning, we will see a handful of such features that actually have an impact, and we'll double down on those. I don't know to quantify that now.
To your other question about logged-in users and driving yield. I don't think it's as much about the logged-in user as it is about the depth of data we get. I mentioned I'm a Rivals user, which is a Yahoo property, but I hope they still are. And I'm a Yahoo Sports user, and I'm a Yahoo Finance user. Yahoo is my homepage. They get so much data about me, depth of data. You know, Taboola tends to see people, what's the latest statistic? 2 to 3 times a day?
Yeah, almost 600 million people a day.
Yeah.
Two to three times a day.
Two to three times a day. Yahoo sees me 30 times a day. It's really about the depth of the contextual data that we're getting to understand that somebody who's, you know, reading about fantasy sports, when they click on something, they tend to click on these types of articles or these types of links, or when they come back to Yahoo the next day, they also correlate with people who read financial articles or something like that. It's really the depth of the data, more so than the logged in user. That depth of data is what Adam referred to. We do believe that's gonna lift all boats on our network and also the advertisers we're bringing across. You know, having all of our advertisers spending on Yahoo's supply is gonna raise that yield.
Having all of their advertisers being able to spend on our supply is gonna raise all boats on our network currently. We do think the combination of data and all the additional advertisers kinda raises all boats from a yield perspective. I think that's a perfect question to end on. Thank you, everybody, for coming. No, feel free. Thanks for coming. I do wanna remind everyone that we have some demo stations set up. In this room, there's two stations at the back on either side of the coffee station. At those stations, you can see what Yahoo native ads look like. Like, I think a lot of people don't realize which ads on the Yahoo sites are native. One of the stations is for desktop, so you can see it in a web browser.
The other station is mobile devices, so you can see it on the apps, and you can see it in the mobile web. I think it's kind of interesting to see those. Then in the other room, and please don't everyone stampede to this room, we have some demos that show how we're using generative AI, mostly very early stages. We have demos of using generative AI for headline writing and also for even image generation for our advertisers. Please stick around, check those out. We also have food outside. I don't know how good it is. I haven't tried it yet, so I make no promises, but hopefully it's good. Thanks, everyone, for coming. We really appreciate it. If you want more time, reach out to Rick or investors at Taboola.com. Thanks, everybody.