Why Did Taboola Acquire Commerce Sciences?

Taboola, the company behind the recommendation widget you see on the bottom of some of the articles you read in TechCrunch or Bloomberg, has just made its third acquisition. It acquired Israeli startup Commerce Sciences, for an unknown sum, probably a few millions as estimated by TechCrunch.

Commerce Sciences enables small and medium-size e-commerce websites to adjust their layout and information in real-time based on profiles generated for each visitor. Through A/B testing to see what works best, Commerce Sciences allows clients to increase sales while remaining cost-effective. It is doing so by applying behavioral science to an “Amazon-style” personalization platform offered as a SaaS service.

The analysis is done according to 40 parameters based on input from psychology and marketing experts, such as what site each visitor arrived from, what words they type into search engines, the time of day, and more. (Read the full Zirra Spotlight Report on Commerce Sciences, produced just weeks before the acquisition).

So, why did Taboola acquired Commerce Sciences?

Few good reasons to that.  Taboola wants to extend its portfolio of products to the publisher. With Commerce Sciences, it sports a new technology that increases personalization of ads and content, not only at the bottom of the page but also on other real estates. The publisher can now present the best image on the page to attract more readers, or place the button that will cause more people to click on it.

Will Taboola start selling to e-commerce websites? probably not, or at least not in the near future. Commerce Sciences will also close it current business following the deal. Taboola had to move fast, deepen ts control over more spaces on the publisher’s website and accelerate the development of such features as the market becomes crowded. Dynamic Yield, a startup that had developed a set of tools covering everything from A/B testing to messaging to personalized product recommendations, nabbed $22 million from just a month ago.

Zirra maps many more direct and indirect competitors that are now pitching publishers and e-commerce websites alike: Optimizely, Monetate, Maxymiser, and Adobe Target that Taboola sees as its main competitor in the field. Taboola also competes fiercely with Outbrain and should stay in constant vigilance for any possible similar product that might be launched by it. (Read Zirra’s Spotlight Report on Taboola here)

Just weeks before the acquisition, Zirra had raised some red flags regarding Commerce Sciences’ ability to grow. According to our report, the startup should have displayed a stronger differentiating factor to surpass the clutter. We also had marked that Commerce Sciences was in an early stage of growth. Probably, it didn’t grow large enough to justify another financial round. The merger thus makes a lot of sense, bringing innovation from the overcrowded e-commerce area to publishers.

Read our full Zirra Spotlight Report on Commerce Sciences, Taboola and Dynamic Yield

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Assaf Gilad

An ex-journalist from Calcalist, a leading business and tech news outlet in Israel, I'm now writing about startups for Zirra.com.