You’ve probably heard the news: following a successful strategic partnership, Gravity R&D (or Gravity for short) is being acquired by Taboola, the leading content discovery platform of the open web. Our office in Budapest, Hungary is to become Taboola’s R&D hub in Central Europe.
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Work in Progress: The Timeline
Joining forces with Taboola has been a few years in the making. Here’s how the events have unfolded so far:
- At the end of 2018, Taboola approached Gravity R&D with a proposal to collaborate on personalized recommendations for its content discovery platform. (As is generally the case with such inquiries, we were not privy to information about other contenders, if any, for the partnership.)
- In the course of a selection process lasting almost two years, we eventually qualified to team up with Taboola on a project of strategic importance. The agreement was sealed in late 2020.
- By this time, we had already started collaborating with Taboola on a new DCO (Dynamic Creative Optimization) feature. After Taboola tested the pilot version successfully on a sample of its clients, the feature was launched in 2021.
- Talks about integrating Gravity R&D into Taboola began early this year. The news of the impending acquisition became public in May, and the process is expected to be completed in July at the latest.
Content Discovery by Taboola Makes Publishing Sustainable
Founded in 2007 by Israeli software engineer Adam Singolda, Taboola initially sought to bridge the gap between individual people’s preferences and the masses of content available to them, by means of recommendations. Taboola eventually established itself in content discovery for the open web: serving online ads alongside content recommendations on publisher sites, and sharing the ad revenue with the publishers. Everyone involved benefits from this business model: the media outlets make money from the ads; the advertisers get exposure; and the users enjoy relevant content and offers.
Today, Taboola is a global leader in this market, publicly traded on Nasdaq, and employing over 1700 professionals worldwide. Its platform connects some 9000 publishers with more than 15 000 advertisers, and it serves 500 000 recommendations per second.
Accurate recommendations have been crucial to Taboola’s success. Beyond item-to-item algorithms, matching content with potentially relevant ads, the obvious next step was personalization: taking into account users’ online behavior to generate recommendations that truly resonate with them.
And not just any personalization. Using Taboola’s open platform, any advertiser can bid on impressions in order to reach users with the most relevant ads. Those armed with a DCO function are at a clear advantage, because of their ability to instantly match ads with potentially interested users. In response, Taboola wanted to up its recommendation game: to build its own DCO feature, using a personalization engine that was faster and more powerful than those of its rivals.
Gravity and Taboola Collaborate on Dynamic Creative Optimization
Impressed by Gravity’s track record in the field of personalization (ever since the founders’ success at the Netflix Prize competition), Taboola management sought out our company with collaboration in mind. Then, based on careful evaluation of specific KPIs, Gravity R&D was eventually singled out for the purpose of a strategic partnership.
The DCO solution we’ve been working on together helps to take Taboola’s recommendations to the next level, by mapping out user preferences and changing ad creatives accordingly in split seconds. It has also pushed us to further improve the response time of our recommendation engine: the industry standard in online ad bidding is faster than what’s expected in a personalization context – itself a matter of milliseconds. (Advertisers bid on impressions using Taboola’s platform; with its SmartBid technology, Taboola can tap into historical data to determine which impressions are most likely to convert – all in real time.)
For now, DCO is applied only to a fragment of all Taboola traffic, but it still means a staggering amount of recommendation requests for our system to handle.
Next Step: Gravity to Be Acquired by Taboola
When Taboola proposed to acquire Gravity R&D, the ensuing negotiation process was fairly quick and conclusive. Both parties had a lot going for deeper integration.
Taboola, for its part, wanted to own the DCO product instead of having to depend on an external provider for such a key function. What’s more, Taboola wanted to own the team behind the product, recognizing in it a research and development potential that could be leveraged and expanded. On top of our solid credentials – the performance of our recommendations, our ability to quickly meet technical requirements – “soft” factors like the convenient location of our HQ in Budapest (only an hour behind Taboola’s Tel Aviv office), good chemistry, and similarities in company culture also made Gravity an attractive choice for a deal.
For Gravity R&D, the benefits of joining forces with Taboola were clear even in the investment phase of the partnership. Being acquired by such a tech giant would not only mean a successful exit from the startup market, but also access to new clients through Taboola’s extensive outbound sales network. All on top of developing the new, shared DCO product that raises the bar of Gravity’s performance across the board. Last but not least, we were thrilled by the prospect of being able to keep working with some of the best developers and data scientists in the field without having to worry about the costs.
Going Forward: Expansion Into a Research Hub
Gravity R&D will remain a separate legal entity within Taboola and will continue to serve its personalization clients with its own brands. In addition, special focus will be dedicated to the DCO function we’ve developed with Taboola, as well as to new, shared projects. Our core professional team will be integrated into Taboola’s corresponding departments.
As part of its pledge to invest $100 million a year in R&D, Taboola plans to expand our Budapest office into a regional research and development hub. This means we’ll be able to substantially increase our capacity to develop proprietary algorithms that help to tackle the latest challenges in personalization – ultimately, to provide cutting-edge solutions to our clients’ business problems.
This also means that the core Gravity R&D team will undergo a large-scale expansion. We aim to increase staff numbers from about 30 to over 100 in the years to come. We’ve already started recruiting developers – back-end, front-end, full-stack – as well as data scientists and engineers, and devops professionals.
Just like Gravity, Taboola prides itself on being a “people company”: holding the individual value of employees in equally high regard as the products they’ve built; and striving to create ideal working conditions for them. Instead of being convoluted hierarchies, both our companies foster the sort of startup culture where every contributor can observe their direct impact on the performance of the product they’re working on. Of course, with Taboola’s vast output, this impact is greatly amplified.
A rigorous selection process, ensuring that only the sharpest minds and the best team players are chosen, is another thing we have in common with Taboola. We’ve always prided ourselves on offering competitive salaries and financial security to our employees, but our acquisition by Taboola is definitely taking these prospects to the next level.