Outbrain said to be considering an IPO that could value it at $1B

6 Comments

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.”

6 Comments

Nick Cicero

That seems like a rushed idea for a decent company that I like a lot. Can’t they recommend any other options for themselves?

Connor Ryan

Revolutionary business model… brilliant. Uses data science to serve up what’s truly “interesting” to the end user — not just what’s contextually relevant. This is good for publishers, advertisers — and, most importantly, end users. Think of it as an Ad Sense killer.

Kenneth Trueman

I have to disagree with you. Most of the suggestions put up by Outbrain are of the lowest common denominator sort. Complete clickbait, white trash, etc., content from sites that pay to be there and have nothing to do with the sites that most visitors are on. When I go to The Atlantic, I am not expecting some link for secret tricks about belly fat or some airhead celebrity without make-up.

Yes, it is possible to train these systems over time, by deleting the suggestions one does not like, but even then there are usually sponsored articles that have nothing to do with the demographic or interest driving a visit to a site.

Andria Tay

The Atlantic uses Taboola, not Outbrain, and therein lies a major difference btwn the services. Not that Outbrain never has trash in the feed, but they’re much more diligent about monitoring the content.

Kenneth Trueman

Duly noted. As you can see, i failed to distinguish between the two because they both serve up content of questionable relation (and value) to the content that actually brought me to a given site.

bob

I’ve experimented with Outbrain and I can only say “meh”. We got a few clicks, but the price was much too high. The problem is that I can’t get 1/100th of the click price from my advertisers. So it’s a losing game unless someone says, “Wow. This is a GREAT site, I’m coming back every day.” But they don’t do that. They just surf to whatever articles that their friends post on Facebook. There’s no feedback.

Comments are closed.