If you’ve been to any one of a thousand different news websites, from CNN to US Weekly, you’ve probably seen a “suggested reading” or “recommended for you” section at the bottom with links to other sites — some of which are sponsored ads. In all likelihood, those links are powered by Outbrain, a New York-based company that is reportedly considering an IPO on the Nasdaq exchange that could value the business at about $1 billion, according to a report in the Wall Street Journal.
Quoting people “familiar with the matter,” the Journal reported earlier this week that Outbrain has filed a confidential prospectus with the Securities and Exchange Commission for an initial stock offering, and if approved it would go public early next year.
Outbrain, which currently has over 400 employees, was originally founded in Israel in 2006 by Yaron Galai, who sold a previous company called Quigo to AOL in 2007 for $365 million. Coincidentally, Outbrain’s main competitor when it comes to “recommended for you” sponsored links — a company called Taboola — was also founded in Israel and is now based in New York.
Outbrain has raised $100 million from a group of venture investors, and Taboola is reported to be looking at raising about the same amount in its own funding round. Although Outbrain doesn’t disclose its revenue, Taboola reported earlier this year that it has a 12-month “run rate” of about $250 million in revenue.
While they may be growing quickly, however, not everyone is enamored of their business model of showing viral “clickbait” in an attempt to drive traffic to publishers and/or advertisers. Venture capitalist Marc Andreessen said earlier this year on Twitter that “anyone serious who uses [a third-party related content module] should be shot.”