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Justice Department okays merger between two clickbait companies

Summary:
See Taboola and Outbrain’s Clickbait Marriage: What Happened When the Justice Department Showed Up: Antitrust officials, after studying proposed merger of industry leaders, don’t object at the altar by Brent Kendall and Patience Haggin of The WSJ.Although no market share numbers are given, it says the two firms dominate the industry. But the Justice Department says competition is emerging from companies like Verizon and Alphabet.Excerpts: "The Justice Department decided not to challenge a merger of rival internet companies whose sponsored-content offerings generate revenue for publishers around the globe.The department’s antitrust division recently informed ad networks Taboola Ltd. and Outbrain Inc. that it wouldn’t stand in the way of their proposed merger,""The companies, which

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See Taboola and Outbrain’s Clickbait Marriage: What Happened When the Justice Department Showed Up: Antitrust officials, after studying proposed merger of industry leaders, don’t object at the altar by Brent Kendall and Patience Haggin of The WSJ.

Although no market share numbers are given, it says the two firms dominate the industry. But the Justice Department says competition is emerging from companies like Verizon and Alphabet.

Excerpts:

"The Justice Department decided not to challenge a merger of rival internet companies whose sponsored-content offerings generate revenue for publishers around the globe.

The department’s antitrust division recently informed ad networks Taboola Ltd. and Outbrain Inc. that it wouldn’t stand in the way of their proposed merger,"

"The companies, which dominate their industry, create “promoted stories” and “around the web” sections that many high-profile publishers deploy next to their articles and videos as a way to generate additional revenue.

The content, widely referred to as clickbait, is designed to be hard for readers to resist."

"The Justice Department initially thought the merger raised enough potential concerns that it was worth scrutiny, and it spent months examining company documents, interviewing top executives and talking to both companies’ customers, people familiar with the matter said. After considering a range of industry dynamics, however, the department concluded that the merger wasn’t likely to suppress competition, in part because it found that other companies were getting into the sponsored-content game, the people said."


This reminds me of "Contestable Market Theory." See Contestable Market Theory by Daniel Liberto of Investopedia. Excerpt:

"Contestable market theory is an economic concept stating that companies with few rivals behave in a competitive manner when the market they operate in has weak barriers to entry. Contestable in economics means that a company can be challenged or contested by rival companies looking to enter the industry or market. In other words, a contestable market is a market whereby companies can enter and leave freely with low sunk costs."

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