Could it be? Has the most talked about Israeli high-tech merger, since falafel and hummus were placed in a pita pocket, gone up in flames? According to new reports, the merger between Taboola and Outbrain, which would’ve created a $2 billion firm, has broken down, as both of the advertising-based content recommendation engines have ceased communications.

Dispute over terms and the looming global pandemic

Adam Singolda’s Taboola was originally supposed to hold 70% of shares from the proposed merger’s newly created firm, which was supposed to be valued at $2 billion. Outbrain’s shareholders were expected to get the remaining 30% along with $250 million in cash. Had the deal gone through, obviously, we would have witnessed reorganization of the newly founded content recommendation giant, which intended to create a team of 2,000 employees combined from both companies, meaning there would have been no place for dual roles in the company.

The merger between the two companies has been on the table for years, where each time the deal was blown up due to “differences in company culture”, as informed by a source close to the subject. Just in 2019, a deal between the two Israeli companies was heating up, even coming to an agreement on initial terms. However, now, TechCrunch reports that the deal hit the fan following a number of different reasons, among them the ongoing global COVID-19 pandemic, which has caused cutbacks in the monetization game; as well as Taboola wanting to change terms in favor of the company’s shareholders, after allegedly outperforming Outbrain over the course of the Coronavirus crisis. Another, wrench in the process would have been the regulatory approval of the different markets, where the two companies operate.

As a result, the initial agreement wasn’t extended and eventually expired, ending in the deal blowing up. “The market has changed due to the COVID-19 outbreak,” explained a source close to the deal to TechCrunch, who further added that “it was a long journey, but separating is the right move.”

Taboola and Outbrain’s advertising-based content recommendation technology exposes users to a variety of different web content, which are based on browsing history, demographic data, and personal information regarding user habits. You are probably already familiar with boxes at the bottom of articles that read “Recommended For You” or “Around the Web” that launch you deeper down the customized targeted content rabbit hole.

Outbrain was founded in 2006 by Yaron Galai and Ori Lahav, and has raised $194 million since it was established. Taboola, which was founded in 2007 by Adam Singolda, has raised $160 million to-date.