Taboola and Yahoo Accuse Each Other of Breaching Major Partnership Deal

An escalating legal dispute has emerged between Israeli ad-tech firm Taboola and Yahoo, with both companies accusing each other of breaching their 30-year partnership agreement. The conflict, revealed in Taboola's latest SEC filing, has moved to mediation after both parties claimed "material non-compliance" by the other regarding their Digital Property Services Agreement. Taboola has not disclosed the specific contract clauses in dispute, the demands of each company, or whether the partnership itself is at risk.

The agreement, signed in November 2022, is crucial to Taboola's distribution strategy and a significant revenue source. Under the deal, Taboola became the exclusive provider of native advertising across Yahoo's digital properties, including its news, finance, and sports services. This partnership was envisioned as a 30-year collaboration to boost Yahoo's advertising operations and grant Taboola access to a vast global user base. Yahoo also became a major shareholder in Taboola, receiving nearly 84.7 million shares in January 2023, valued at approximately $288 million, and the right to appoint a board representative.

Taboola reported $68.2 million in Yahoo-related revenue in Q3 2026, representing 14.8% of its total income, up from $52.1 million (10.5%) in the same period last year. For the first nine months of the year, Yahoo-related revenue reached $217.2 million, or 15.5% of total revenue, compared to $146.9 million (10.6%) in the corresponding period of 2025.

The contractual dispute occurs amidst growing pressure on Taboola in the capital markets. The company's stock has fallen approximately 53% year-to-date, despite a recent 7.5% recovery to $2.15. The stock plummeted after Taboola reported Q3 revenue of $462.3 million, a 6.9% decrease from the previous year and below analyst expectations, though net profit and adjusted EBITDA saw increases. The company's Q4 revenue forecast of $477-$493 million also disappointed investors, falling short of the $534 million analysts had predicted.

Taboola CEO Adam Singolda has cited broader shifts in the digital advertising market, including the rise of AI-generated summaries and new information discovery methods, as challenges impacting publishers' traffic and ad revenue. The company is working to expand publisher relationships, grow revenue from existing partners, and develop new areas like Taboola News and Social Commerce. Separately, Taboola is facing a securities class-action lawsuit filed in August, alleging false or misleading statements about its publisher relationships and revenue forecasts. Taboola maintains it has strong defenses against this lawsuit.