And then you have other kind of mid-size OEMs and all of that is before working with carriers, which we have not yet really done, so over time you can imagine Taboola supports not only OEMs directly, but perhaps carriers and again, this is like a 5, 10 years roadmap for this business. So there’s a lot of ways this can become hundreds of millions of dollars and effective and even more.
Operator: Thank you. Our next question or comment comes from the line of Mark Zgutowicz from The Benchmark Company. Mr. Zgutowicz, your line is now open.
Mark Zgutowicz: Thank you. Good morning, Adam and Steve. Just curious on the Yahoo advertiser migration. I’m just curious how much visibility you have on making that happen there by mid-2024. Just maybe more specifically, do you have like a concentration of advertisers that have committed to moving over after the seasonal holiday period? And then just in terms of the eComm, just broadly speaking, can you talk about how your go-to market there is perhaps evolving and sort of what types of new client engagements you’re seeing, obviously you’re having some continued pretty strong growth there, but just maybe how that strategy is evolving? Thanks.
Stephen Walker: Sure, I’ll start with the Yahoo advertiser migration question. So, yes, I think we have very good – we’re partnering very closely with Yahoo on this. It’s in Yahoo’s best interest to help us with this migration, because obviously the revenue that those advertisers bring flows back to them largely, so there we’re working hand-in-hand with them. We have good visibility from working with them on what we need to do. We obviously know kind of what the concentration is and which advertisers we need to move, like that’s what we’re working with them on. So I think we have very good visibility. I think we have a pretty good notion of what we can get done on that. So, I feel good that we have what we need. We have the visibility and we have a plan in place with them to help make it happen.
Adam Singolda: Yes, so about eCommerce, firstly I’m very happy with our decision, our strategic decision to acquire Connexity and get into eCommerce in a significant way. I think it’s going to play a very important role in the future of Taboola, as well as the future of the open web. So it’s a very lucrative part of our business that will continue to be as such. And we’re seeing that in the results of our business. So I mentioned that we saw double-digit growth in eCommerce in Q3. And that is driven by a lot of what we said we’ll do. International expansion in Europe, the synergy with Taboola and now Yahoo as a source of supply on top of what Connexity had before. I’ll tell you, Taboola is now a Top 10 partner to eCommerce buyers or retailers now when they see where is traffic coming from, Taboola is now a top 10 traffic source, which is great.
We’re, again we’re – and we’re signing new clients, as we’re investing more in growth, more sales outside of the U.S. So we’re seeing in EMEA, and APAC, new clients and new affiliate partnerships. So all of that is great and as it relates to our business, it’s trending to be about 20% or almost 20% of our ex-TAC which is great, because it’s very premium consistent reliable source of revenue and over time I think that’s going to – that has a chance of being a third of our business as well, as a third of our publishers, we’re seeing some publishers that now make as much money from eCommerce as they make from native advertising, some of them even make more than from eCommerce. So if you think about that future, that means if you’re not in eCommerce and you don’t have an eCommerce offering, you may not – you may become relevant over time.
So that makes me happy.
Mark Zgutowicz: And then just in terms of the capacity to address the eComm opportunity, how would you characterize that in terms of having enough capacity to address obviously a big opportunity?
Stephen Walker: Yes, so I’ll jump in on that. I think so, when you say capacity, I assume you’re talking about people resources and the other resources we need to run the business. Is that kind of how you’re – what you’re thinking about?
Mark Zgutowicz: Right. Sales strategy broadly with sales capacity.
Stephen Walker: Yes. So think what’s interesting – yes, I hear you. What’s interesting is, and I think we said this at the time that we acquired Connexity. This is a business that makes very good revenue, very strong EBITDA, is run by a private equity firm for a long time. Despite the fact that, frankly, in our view there it was probably under invested in, in terms of looking for seeking growth. So I think what we’re doing right now is we’re investing more resources into growth areas for Connexity and for our eCommerce business more broadly. So, for instance, we’re bringing on more salespeople to sell new merchants in the U.S. and abroad. We’re helping them expand internationally into territories where they really didn’t have a strong presence historically.
And then we’re also taking advantage of other synergies that work with our core business. For instance, we disclosed in our shareholder letter that – and in my prepared remarks that actually Taboola Feeds are now a top 10 supply source for our eCommerce advertisers or our merchants, as we call them. So it’s a – it’s been, it’s been a success story in terms of all the good things that are going on there. And I think I would characterize it as, we have what we need to run the business. I think there’s still opportunity to invest more and grow faster over time and that’s really what we’re doing now. So that’s, in Q4 here, I mentioned that there’s really two areas that we’re investing more people in and that’s the Yahoo and eCommerce and it’s because we think there is potential to grow eCommerce even more and faster.
So I’d say we have what we need to keep it going. We probably can invest more to grow it faster.
Mark Zgutowicz: Great, that’s helpful, Steve. Thanks a bunch.
Stephen Walker: Thanks, Mark.
Operator: Thank you. I’m showing no additional questions in the queue at this time. I’d like to turn the conference back over to Mr. Adam Singolda for any closing remarks.
Adam Singolda: Thanks operator. And thanks everyone for joining us today. As you can see from our results, we feel very good about our performance this quarter and where we’re going. There are many, many things that are going strong, Taboola News, eCommerce, our AI powered bidding technology with Microsoft and others. Our core business, which is well positioned and only getting stronger with Yahoo. And our massive investments in performance advertising technology to drive yield expansion, like I told you, that’s one of the key things, it’s going to – it can double and triple Taboola over time on its own. I look forward to 2024 to arrive. It’s going to be an important year for us as we make big step forward towards becoming very first ever large scale must-buy advertising company in the open web.
I’ll finish my summary here, I would – the same way I started the call today. I want to send our employees in Israel and their families my prayers, my heart is with all of you and I think about you all the time. And I want to thank everyone for the hard work at Taboola and the dedication, especially given what’s going on in the world. And to our investors, thanks for the support and interest and here’s to a great, great 2024.
Operator: Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program, you may now disconnect. Everyone have a wonderful day.
