Taboola.com Ltd. (TBLA) Earnings Call Transcript & Summary

All right. We're ready? Great. Hi, everyone. Thanks, everyone, for joining us today. As you know, we are here with the Taboola Founder and CEO, Adam Singolda. Thanks, Adam, for joining us.

Thanks very much.

Exciting first day of our 2024 TMT conference. Great to have you kind of closing up the day for us here today. So where to start? You founded Taboola 17 years ago now?

2007.

2007, 17 years ago, I guess. For those that might be a little less familiar here, can you tell us a little bit about the journey and the problem that Taboola is solving today?

Sure. Thanks for having us. So at a high level, we act as -- I start Taboola back then, it's my first job after spending almost 7 years as an engineer in the army and my [ extent ] strongly suggest from the Holy Land in Israel. And the reason I start Taboola was because I couldn't find anything to watch on TV. And I thought that people, all of us, should not be looking for TV shows and TV shows should be looking for us and/or this need for this recommendation engine that could travel around everything we do outside of walled garden, right? Like if you go to Facebook, they have their own recommendation engine. If you go to Amazon, they serve you, people who buy this also bought that. But if you go anywhere else, any website, any app, any digital or canvas outside of those walled garden, there wasn't any similar AI that would say you might like based on people like you and things like that. So the idea was to start a recommendation engine for the OpenWeb and serve this entire market. It's about $80 billion market. And what's interesting about it is that the biggest opportunity is the way the OpenWeb, which is websites like CNBC or NBC or many apps were on, the way that they're being monetized is using banners. If you think about banners and anyone in this audience, I mean, none of you remembers the last time you clicked on a banner not accidentally, I mean. And then -- and that means that it's not really engaged in user experience. When we go to Instagram, they serve us this sponsored beautiful post. When you go to Google search, the search ads look the same. It's all native. On Amazon, you buy one thing they say, "You might want to buy this." So everyone moved away from this traditional...

Display.

Display boxes. Meanwhile, in the OpenWeb, which was starting about 30 years ago, most of the $80 billion are these display ads. So the opportunity is to kind of imagine a redesigned Internet that feels and look and relevant like Twitter or Snap or TikTok or Instagram, and grow that market and be the leading gateway for advertisers to reach the OpenWeb.

So bring that to life for us, if you could. So I'm on cnbc.com or we'll get into the Yahoo parts, I mean, Yahoo Finance. Bring to life how Taboola powers from an actual use case standpoint? Recommendations and advertisements and how that all work?

Yes. And I'm sure many of you are using us daily. So about 60 million people a day go to websites across the Internet from ESPN to CNBC, to Yahoo Finance and any other site. And usually, the way it would be -- you would see us would be either at the end of the article. To get us to CNBC, it will say, more from CNBC you might like. But this is us just been our recommendation engine for CNBC videos and content and more Squawk Box and more Cramer, whatever that is on CNBC we think you might like. We don't get paid for that. So this is one of our added value services to help users be engaged with the site. And the publisher appreciates that because we grow the pie. We make people excited to stick around and so forth. We also did the same for the home page, if you go to USA Today, the entire homepage is personalized using our AI. So it feels relevant for you versus a aesthetic homepage. So that's the core service, which is being delivered at no cost and we all use all the time. And then in between recommendations, you might see people who read this thing also want to buy a piece of furniture from Wayfair. If you click on that, we take it to Wayfair, we get paid, and we share that with CNBC. This year, we'll generate about $2 billion of revenue from this type of advertising format.

And how do you think about your secret sauce in terms of driving that personalization in a world where it isn't a walled garden, so people might not be logged in. Obviously, in a world where cookies are deprecating, how does this work today?

I like it. I like it. First of all, I think it's -- privacy is a good trend. I mean it's kind of -- it's freaking out to see as it follow you. You bought a shoe once now everything looks like that's you. It's not fun. So as a consumer, I kind of like privacy trends, I like cookies going away. I think the world needs to be relevant but safe. So I like this trend. And I also think that if I compare Taboola to Facebook, we would -- we use Facebook all the time. We're logged in but would you ever share with Facebook something that is really important to you or personal? As an example, I have 3 kids. If my daughter doesn't feel well and I'm curious about what people might give me feedback about that. I would never put it on Facebook and say, "Hey, my daughter has this. What do you think?" But I will read about it a lot, right? Like I'm going to be up at night, reading about it on a weekend. I'm going to get really curious about something. And the soon about maybe my passion project, I might really like -- I don't know, certain shows, but it's embarrassing to put it on Twitter. But I read about it and I follow it. And so there's just a lot of things I care about, I'm curious about, but I will never share those with others. And this is the fundamental difference between social networks, which is kind of the identity I wish people thought of me versus the OpenWeb, which is the things I truly care about because it's just me and the Internet. And this is where Taboola sees you. So I kind of think of Taboola as this curiosity graph that allows us to see the context of what you're doing right now as a proxy for who you are versus what you would have told me about yourself had I ask you. So I think this is a great -- it's a good thing for users, and it's great for advertisers because they don't have to target demographics and things of that nature. They have to target things that are relevant in the context of which market I'm in right now. If I'm reading about furniture, I might be in market to buy it. If I'm reading about real estate, I might be in market to move. And we have almost 20,000 advertisers work with us direct who rely on us to deliver this consistent performance in the OpenWeb. And I think the OpenWeb can play an important part especially in today's world, I mean, we want our children to live in a world where they can make decisions based on editorial content, human-driven content versus social networks, which in many ways, have some tax we pay for and we're seeing it in the world today. It has -- it's a bit dangerous to aside, believe in the OpenWeb, in journalism and Taboola is kind of like the Robin Hood for that market.

So contextualized contents that you have code on the page to either read or get what the context is, and then you can power the recommendations?

Right. Use context as the strongest signal for what I might be interested in and compare it to people like me that were in that context, but you may know nothing about me. Like you may not know my gender or my age, and that's perfectly fine because you can still drive -- and by the way if you look at even Google, how they started, it was so much contextual advertising with AdSense and so forth. So we know it's very good. And we know the market is big. Now the question is, can you redesign the experience or it feels like people expect from social network as banners move into more native. And can you become the first must-buy advertising company in the OpenWeb and that's kind of our mission.

AI, big theme. It will be a big theme around the advertising market. Yes, how does Taboola think about AI opportunity today and over time?

The -- first of all, I think it's really for investors to know it's -- AI, in general, is really -- like we all say AI all the time, but it's really hard. I mean there's a huge difference between machine learning, ML; deep learning, DL; and b*******, BS, right? And very rarely, actually, if you look at companies around the world, have you seen companies that have a lot of engineer experience and data to truly do deep learning and the level we all expect? What we've seen now from GenAI or when you go to Amazon, it makes so much sense to you. That's really hard to do. And so we're very proud of our investment in AI. I think today, the biggest achievement we've had to date is people engage and discover something on Taboola like an article or a video or a product, high tens of billions of times a year. So we interact with 600 million people a day and they discover so much in Taboola, and that's something that we've been working on for a decade. On the advertising side, I'm going to get a little bit of technical here. When you buy from Facebook and Google, you don't have to tell Facebook and Google what is your CPM or what is your CPC. I don't know. In this audience, who knows what CPM is? Raise your hand if you know it. There's a reason why -- I mean, you shouldn't know what CPM is. Because if you walk into any business and you ask them, what is your business metrics? If you walk into a flower shop and you ask the owner, "Tell me what's the value of someone coming into your store and buying flowers?" 0 flower shops will say, "Well, CPM is $15." It will never happen. What they know is that a client is worth $30 and because that's how much they sell a bouquet. If you walk into any store, they usually have an opinion about what is the value of the client. None of them have ever said, "Well, CPC should be $0.30." This was invented in AdTech. It was invented in this industry of many, many small companies that did not have the AI of Facebook and Amazon and Google. When you work with Google and Amazon, they never ask you that question. Your flower shop, you've got a Facebook and you say, "I have a $5,000 budget, go and get me clients because I want to sell flowers" And they do it. We started investing in deep learning about 7 years ago, and I'm proud to say that as of our last update, about 50% of our revenue, which this year is approaching $2 billion is going to be using similar AI. You don't have to tell us anything. You just tell us what your budget, your goal, and we do it for you. By the end of the year, I suspect this would be the vast majority of our revenue, which is amazing. And two, we've incorporated GenAI into our advertising console. So if you're an advertiser, you don't have a creative agency, we'll help you come up with titles and some [ names ] and soon maybe even landing pages. So not only do you have to not tell us your CPC or CPM, you don't tell us anything. You just say, "I want to sell flowers. Come up with titles, come up with some [ names ] , generate my page and get me flower to clients." And this is where it's gone over the next few years, which is amazing for businesses, and they were up for 24 companies that have data and scale like us.

You mentioned a lot of small companies. I think the AdTech sector has a reputation for being confusing with too many companies out there doing similar things. You just mentioned also about being sort of a one-stop shop for advertisers. Who do you serve today? Who -- like who are Taboola clients? Are they the advertisers? And how do you think about your platform serving both publishers and advertisers and where is the world going?

So I think in AdTech, there are 2 challenges in AdTech historically, which I think Taboola overcame with our -- the way we do business. The first one is that, to my knowledge, AdTech companies don't have exclusive long-term relationship with publishers. They bid on inventory, which means they may see it today on the website but they may not see you tomorrow if they don't win an auction. So they participate in this waterfall and auction that they don't really have consumers they know are theirs. Why do we love Facebook so much? Because we know Facebook has 2 billion people logging in every day. They're not going anywhere. And if they go, they're not running out. So Facebook can focus on improving ARPU and growing the business. And AdTech in OpenWeb, it was never the dynamics. It was always this option and it was exposure in that space. With us, all of our publishers are ours for the next 3, 5 with Yahoo's 30 years. So we have this predictable user base that allows us, gives us the license to improve ARPU against those users. That's one thing. The second thing is, historically, in AdTech, most companies didn't have direct-to-client relationship. They work with programmatic companies and agencies and things. For us, 90% of our revenue is direct. It's our client. They bought from Taboola. It's in our technology. And they have pixels on their page, which allows us to optimize the performance for them. So between those 2 things, we look like a walled garden but in the OpenWeb, which is the right dynamics, I think, for obviously shareholders because it's more predictable. But also for us because we can grow the company to the size and scale that we want. The second part of your question, our clients are mostly performance advertisers. So it's very resilient type of business because they work with us because it works versus wine-and-dine type of business. They're mostly mid-funnel. So think of a Wayfair trying to get someone to sign up to a newsletter or someone to subscribe to something. So it's not necessarily immediate action. And then a growing piece of our business is e-commerce, which is more immediate action. That's about 20%. So that's kind of the mix of revenue. And then with Yahoo now coming onboard, we're seeing new types of clients, which is more the Verizons and Hulus and top of the markets that are spending with us.

And is the world historically split between brand and performance? Is the world like retail media and all these other networks of emerge and digital advertising evolves with AI? Is the world going towards performance and therefore, is the world coming to you?

I think the world was always -- so no one built a multibillion-dollar company relying on brand advertising solely. It was always the cherry. It was always the bonus. If you look at Google, Facebook, Amazon, even Snap and Twitter, Pinterest, they're mostly performance [ limited ] . 90%, 80%, so it was always the case. I think right now, more than ever, after 2022 and just realizing that we need such strong evidence that things are working to justify the budget, it goes even to more extreme that you're seeing big brands, wanting some sort of brand formats of sort. Even if they want to advertise for their brand, they want some metric that justifies doing it again. So thinking of from 2022 moving forward, my assumption is you're only going to grow your company if you can create true value for your clients. There's no more free money, if you will. Like we had a great ride leading into the end of 2021. Money just came in, not necessarily because we all deserved it. Those days are gone. And I think right now, you either deliver the goods and your awesome. Or over time, you're going away.

Yes. Transitioning maybe to recent performance. You guys reported earnings last week. Great momentum this latter half of 2023. How would you sum up 2023 in terms of your performance and the setup heading into 2024?

I'm very proud of us. I mean we -- it was -- obviously, again, on the back of 2022, we've had a lot of work. We just keeping our business executing. We signed Yahoo. And then leading into Q4, we finished with a bang, kind of announcing -- in this earnings, we announced Yahoo being on track. So for those who may not know, we signed a 30-year deal with Yahoo. It allows us to exclusively monetize Yahoo as a property, including migrating Yahoo advertisers into Taboola, including connecting the pipes so we can have even more contextual segment. It's a big one. Yahoo and Apollo, these are great folks like we're very proud to be on the same team. So that's been -- we predicted a year -- a year-plus ago we told our investors, 2024 will be over $200 million of adjusted EBITDA, which is twice as much as last year. And we told the investors it's going to be over $100 million of free cash flow, which is twice as much as last year. I'm very proud of Taboola's team during this time in the world working towards that goal, and we just reiterated that 2024 is a record year across everything. Top line growth of 33%, ex-TAC growth of 25%. And then we just also announced Apple planning with Taboola. So Yahoo was kind of a first of its kind because there weren't many billion dollar a year deals up until that moment when we work with Yahoo. And many investors asked us, "Well, if Yahoo trust Taboola, who is the next Yahoo?" And we said, "Well, now, there's an opportunity for Taboola to kind of be this advertising in a box to empower many partners like Yahoo." And we just announced that Apple News, if you have an iPhone and you swipe right, you see Apple News on your device. And between the news and as you read content, there's an ad placements, which we will power. So that was a huge vote of confidence to have Apple choose Taboola for a quality perspective and then just more reach for advertisers. I'm fairly happy coming in into 2024.

That's great. And on the Yahoo partnership, they had some of their own ad properties. How did they think about signing that long contract with you in that long-term partnership? Like what's in it for them in terms of differentiation or increased growth or more ad dollars on their properties and ultimately, like why Taboola?

First of all, you should know, I wanted a 50-year deal. And I compromised for 30 because I think it's middle of ground. But -- and also renewing this deal in my 70s would be awesome. So -- but let me go back to your question. So I knew Jim Lanzone, who was the CEO of Yahoo because he was the CEO of CBSI, and we had this -- we knew each other -- he signed the deal with Taboola back then 7 years ago. So we had this some relationship and trust between us. And I think that matters at least from an introduction point of view into the process. And for them, I think the opportunity was to work with someone that can grow the pie and makes it even stronger than it already was. And for us, it was an opportunity to work together to get closer to the -- becoming this must-buy. And -- it's definitely a time zone thing.

I'm supposed to wake up too.

So nevertheless, this was, it was an opportunity to kind of like have synergies from a product innovation perspective, but then build the road map together around more formats, e-commerce, coming to market with new opportunities. And what's nice about it is all of our dreams coming into that deal are taking place. We're announcing that advertisers, and I mentioned some of them that used to buy Yahoo using Yahoo's technology have migrated to buy Yahoo through Taboola. So it's the same Yahoo just different way in. And they're seeing amazing results. They're either getting more volume so they're getting more clients for the same budget, or they're getting the same amount of clients but they pay less per client. So it's already kind of evident in the technology that all of our driven specs then will says, "Well, we should do the deal because the technology. Can you improve performance for clients and we can make everyone get the benefits of the synergies?" It's coming to play. We're seeing that right now. And I'm excited about -- it's interesting because I've been doing this for over a decade, and we've never had those types of clients. We had mostly mid-funnel clients. And now we're seeing these amazing names coming in strong, and they're transitioning and they're very happy. So to me, that just opens up. And then with Apple coming in, it continues to push Taboola kind of upfront as a premium place to you -- for you to work with. So that's truly a whole new world for us.

Is that both Yahoo and Apple, and in terms of driving these new categories of advertisers?

I mean, I think so. I think Yahoo already has those clients, right? And then we're going to open it up. So if you think about synergies, we said Q3, we aim to migrate to finish migration of those clients just on the outside. And then we're going to open it up to the rest of the network so they can start buying Disney and NBC and CBS and all of Taboola's great publishers. So that is an upsell opportunity. And with Apple, it kind of says, "Well, maybe more premium advertisers should try this out." Google has 10 million clients, we have 15,000 to 20,000. So I do want to have more advertisers work with Taboola. And ideally, some of these great names can spend more with us.

And is that across your publisher partners as well?

Not yet. Steve is very excited about this one, our CFO, he keeps saying that he's most excited about opening up Taboola's networks to Yahoo's advertisers and specifically, these type of advertisers because we've never had it before. We're big enough. I would like -- we have -- we reach more people than Snap. We reach more people than Twitter. We have such huge reach. There is no reason why we should have doubled our kind of ARPU and double the company with more clients and continue to invest in AI. And this is why it's the #1 investment as a company that we have.

So you talked about, obviously, a very robust outlook for this year. When you think about -- and you talked about '21 and then the doldrums of '22. When you think about the macro picture as we enter '24 and that impact on just overall ad spend. And then as we head into '25, how do you see the environment out there in terms of spend? Is there a difference between sort of past cycles? Like how do you think about the overall backdrop?

So our working assumption, which is embedded in the guidance is that the world is -- stays somewhat flat to us, which means obviously, there's election and there are good things to take place this year potentially, those are upsides. We assume that the privacy and the cookie deprecation, we think that's a potential upside for us because if you look back in 2020 when Apple deprecated cookies, it created an increase in our -- yield accelerated faster in Safari. While other companies were struggling, some budgets came to us. We don't assume that in our guidance but it could happen. So our working assumption is that the world is flat to us. If we get some of those benefits, we'll take them. And then on top of that, we have an assumption that we can improve yield because of our AI adoption -- our max conversion adoption, which we mentioned the 50% adoption of AI. It's the fastest-adopted product since the beginning of Taboola. So we believe this will continue throughout the year, which will create benefits for our yield. So -- and I also think, going back to what you said earlier about 2021 and 2022. I will never be assuming that things are just coming to us, but I believe that we will create or unlock by bringing a lot of goodness to Taboola because we invest in technology that people want. So from that perspective, we assume the world is flat and we can make it better by getting clients to use our technology.

And when you think about the growth opportunity, steady-state growth opportunity being defined as user growth and growth in yields, how do you think about that dynamic this year and over time?

I think we can -- so from the yield perspective, I think we can double or triple the yield over time.

And then can you help maybe define yields first.

So to put it simply, Taboola reach is about 600 million people a day and will generate about $2 billion in revenue this year. It's about $3.5 or so per user. So as of now, in 2024, Taboola will generate about $3.5 a user 2024. Facebook generates about $200 a user. Snapchat generates about $33 for $3.5. So we think we can double or triple that with our own line of sight AI and line of sight more clients to buy from Taboola. So when we think about Taboola as a business, we want more people. I mentioned 600 million. We want that to grow to 700 million and 800 million and 1 billion people a day. And I want the $3.5 to go to $4 or $5 or $6 and more. So this -- that's how we grow revenue at the company. The yield front is our #1 investment because we think there's so much opportunity for us to make it bigger from $3.5 to $7 or $10 over time. And on the reach consumer side, we obviously want to get more. Apple is another way for us to reach consumers. We have a whole OEM business called Taboola News, where we basically print, stall newsfeeds on Xiaomi and Samsung and OPPO and many Android devices who don't have news like Apple News. So we basically we -- as we think about users, we're thinking where else do people interact with anything digital? You have the browser, you have apps, but then you have devices, speakers, maybe Taboola should be integrated in your car, given your user may like. Eventually, Taboola could be -- and because we have such amazing articles, videos, audios, we have it all. And we have a license to distribute that wherever people are. So we want to be, over time, taking our publishers' content and recommendation to even beyond just a browser. And last year, we did report that Taboola News, which is the Android's pre-installed newsfeed crossed the $100 million in 2023, which is the business we've built internally. It's a start-up within Taboola. So that business, investors love it. We love it because it's diversity to our business and it drives traffic to our publishers. So that's another way for us to reach consumers.

Exciting. You guys are expecting a pretty big ramp in EBITDA this year from 18%. Last year 30-ish percent expected this year. What are the main drivers of the margin expansion?

Last year was -- first of all, it is a record year for us, $200 million is a record year dollar-wise. 30% is kind of back to normal for us because we used to be on 30% EBITDA margin. 2022 was a special year because it was an investment year. As we signed Yahoo, there was a lot of things to build and on the board as part of this partnership. So we did kind of acknowledge 2022 being an investment year and -- 2023, I mean, and 2024 being back to normal. So it is kind of our desired margin. We always say we want to -- we're thinking about our business as have gross revenue, ex-TAC should be 35% to 40% or more over time, but we're comfortable in that range. We want to convert 30% EBITDA from ex-TAC, and we want to convert 50% free cash flow from EBITDA. That's kind of our profile, which we want to keep for a long time. So these are worth coming back to it. And the main difference is one yield is growing, which helps. Yahoo is ramping versus last year, which was an investment here, which helps. And we're seeing this diversity, e-commerce is great, about 20% of our ex-TAC, Taboola News, the OEM business is growing. So revenues diversity in our business that also kind of contributes to the bottom line.

That's great. I have one more question, and then we'll take some questions from the room. So you talked about being a must-buy for the OpenWeb. Can you tell us about what that means and what advantages you guys have to unlock that must-buy? And then you guys are already $2-ish billion of revenue. How do you think about the opportunity set going forward because you're already obviously a very big business in and around OpenWeb advertising. So how do you think about that?

I think gross revenue like spend is the main proxy for must-buy because from the client's point of view, you are a must-buy if you're big enough to worth their time. If you think about AdTech, I mean, there's so many smaller companies. It's hard to convince advertisers to work with Google, Facebook, Amazon and then to so many of them that they can work with. So the gross revenue and the spend is kind of like the main proxy, I think, for must-buy. So if you think about the big platforms, obviously, very large. And then you have this from The Trade Desk to Snap to -- what is Pinterest this year?

Size-wise?

Pinterest, yes, revenue-wise?

I don't know.

Yes. I think it's maybe $3 billion or so, and then you have Twitter at $2 billion and we are $2 billion. So you have between $2 billion to $6 billion, you have us. And then you have $1 billion below kind of 50 companies. So I think the opportunity price is to consolidate that fragmentation into a bigger gateway and get more -- go up the food chain into $3 billion or $4 billion or more. So I think now we're at the beginning of our must-buy, like we're quipping in to say, where is the Twitter size? You buy from X, you buy from Taboola's, same size. We reach about the same amount of people, just different placements. So I think that's the best proxy. The second thing is how easy it is for clients to work with you. So I'm thinking about churn rates and NDRs. If they buy from you and it's -- most people succeed. You have AI helping them to buy from you. You don't ask them for CPC and CPM, all those things. I think that's another element. And by the end of the year, I expect most of our business to be like that. So I think the second thing is just making it very easy for advertisers to buy versus how it is today.

And is there an element of -- I mean, kind of saying upside or upsell and cross-sell a bunch of new services and solutions. So there are different formats that you're going to continue to develop?

Yes. I mean, absolutely. I mean if you buy from us -- if Wayfair used to buy from us subscription to their newsletter, well, now they can buy commerce. They can say, "Well, we'll have this campaign with Taboola to buy subscription, but now Taboola's 20% e-commerce, we should also sell tables and cups and things through Taboola as well." And then as we get to work with the Verizons and the Hulus of the world, we can offer enterprise solutions. And they're also looking for different formats, which we're learning from Yahoo a lot. They've done a lot of good things. If you go to the home page of Yahoo, which many of us go to daily for finance at least. You see the ads are beautiful. They're isolated. They always -- they feel premiums. So we're learning a lot about how you can do business with different types of clients and can diversify your client base in that way. But by far, I think the beginning is the size of the business; the second thing is the technology and how easy it is to work with you; and thirdly is the mix of revenue, like you say, so that it's worth their time. They can do a bunch of things with you.

Right. Great. Why don't I open it up to the floor? Any questions for Adam?

Sorry. I'm pretty new to the company. So sorry if the question sounds basic. Like for partners like Yahoo, like how are you going to convince them that you have better yields for their inventory working with you rather than going to header bidding because I know they have like most price discovery like process?

Yes. So in our world, header bidding is less of a -- so it's more relevant for display advertising. And the fundamental difference is that when you don't have a lot of direct demand then everyone is bidding against each other. When you have a lot of direct demand, there's a foundational yield that creates a strong floor. And then programmatic can just make it a bit better. So in our space because most of our demand is direct, we're able to generate a very high yield to begin with. And then we open it up for The Trade Desk. So we work with programmatic companies. The Trade Desk, the DV360 and Amazon and Magnite, PubMatic, we work with -- they're all great friends of ours. But effectively, they're able to win Taboola's own advertiser base, about 10% of the time. So in our space and for Taboola at least, we were able to build such a huge direct demand, which is very similar to like what Google does. If you look at Google Display business, why is Google's SSP so strong? Most of it, they're using their own clients from search, which creates such a high floor. And then they're saying, well, other companies can bid on us and see if they can do better, like DV360 and others. So only a few companies were able to do it up until now, and we were lucky that we worked very hard in building a business that is mostly direct. So when the outlook ask us, they said, "Well, if we bring Taboola in, they're going to create a floor that's already high because of their direct advertisers and their AI, and then we'll see if anyone can do better." We're not opposed to anyone picking our own advertisers if they can do better than us. But effectively, it happens about 10% at a time. So that was one big kind of advantage. Two, I think you all wanted someone who was big enough to rely on them because Yahoo had a $1 billion business and they wanted someone that was more than that so they can rely on them to take over such a big portion of inventory. And there aren't many options out there that can do it unless it's Google, Facebook and [ Snap ] but I mean I think in general, publishers are happy to diversify outside of Google when they can. And we're kind of this independent Switzerland multibillion-dollar company that's not Google, not Facebook, and we will never fight with publishers because we don't have their consumer business. But Google and Facebook and Amazon, they always have this identity crisis because your Facebook keeps you on Facebook or should they send it to the publisher? Does Google keeps you on Google search page or should they send you to the site? We don't have this crisis. So I think publishers appreciate the diversity with us. And specifically, we were unique in offering a high floor to begin with because of the amount of clients we have. It was a great question. Any other questions?

Maybe last one, Adam, we talked a little bit about the fragmentation across the universe ecosystem. How does Google think about M&A strategy?

M&A? Realistically, I think for us, we have so much going on right now between Yahoo and Apple ramping up and our own internal AI investment. And we expect at least 2024 and 2025 to have outsize growth for the company. So it would take a lot to distract us kind of like from that momentum that we have. So we might have tuck-ins if we see them, but I never say never. If you call me, Rob, and tell me, "Adam, I need a meeting." We shall take that meeting. However, I think realistically, we want to be laying down, execute, lay low, do the work and create that multiple I believe we deserve and appreciation we can capture. And then on the other side of it, who knows?

Yes. Understood. Great. Thank you, Adam.

Thanks for having me.

Thanks, everyone.