Content recommendation service Taboola tells Web surfers where to go, 1.5 billion times a day. And it thinks that activity could turn into a really big business one day.
Hence the company’s new $15 million round, led by Pitango Venture Capital; earlier investors Evergreen Venture Partners, WGI Group and Marker are back as well.
That gives New York-based and Israeli-run Taboola a total of $40 million raised to date — which isn’t as much as its primary competitor, Outbrain. That New York-based and Israeli-run content-recommendation service (which works with All Things Digital) has raised $64 million so far.
Capitalization aside, both Taboola and Outbrain do essentially the same thing: They direct traffic from one website to another by suggesting stories and videos to surfers, based on what they’re reading, what they’ve read, etc. They get paid by the website they refer traffic to, on a cost-per-click basis, and share some of that revenue with the publisher that provided the eyeball.
Here’s what both of them look like in action, at the bottom of the same Time.com page (Time Warner’s websites need as many money-generating clicks as they can get. Then again, all of us do.). Taboola generates the four thumbnail photos and links at the top of this screenshot; Outbrain gets paid if you click on any of the “From Around the Web” links on the bottom-right:
There is a great deal of chatter in “native ads” right now — ads that don’t really seem like ads, because they’re “content” — and both Taboola and Outbrain fit nicely in that conversation. Because the recommendations they get money for look pretty much exactly like “real” recommendations the publisher makes itself, for its own content.
On the other hand, you don’t really need a new set of terms to describe what Taboola and Outbrain do. Charging someone a fee to bring an eyeball to their page is something Google mastered a long time ago.