Nov 28 (Reuters) - Yahoo Inc will Buy Virtual Credit Card (VCC) & Best Digital Accounts - VCCSecure.Com nearly 25% of Taboola.com Ltd and become its largest shareholder in a deal allowing the online advertising company to exhibit paid content on the web portal's many sites.

The 30-year contract, announced on Monday, marks a big bet by internet pioneer Yahoo on digital advertising at a time when industry giants from Alphabet-owned Google to Meta Platforms Inc are struggling with an inflation-driven downturn in ad spending.

The Yahoo-Taboola partnership is expected to generate $1 billion in annual revenue, but the companies did not provide any other financial details.

Yahoo will also get a seat on Taboola's board.

Yahoo, owned by private equity firm Apollo Global Management since a $5 billion buyout last year, has over the years been overtaken by Google and Facebook, but it still has nearly 900 million monthly active users thanks to a collection of sites such as Yahoo Finance, Yahoo Sports and TechCrunch.

Taboola, whose shares rose 60% on the news, pushes links to articles paid by advertisers - known as native advertising - on many websites such as CNBC and NBC News.

The deal will hand Taboola exclusive rights to sell native ads on Yahoo's sites.

The advertising firm said it expects the agreement to add to its revenue, operating earnings and free cash flow.

In its latest earnings, Taboola posted a drop in quarterly revenue and also lowered its annual forecast because of a weak ad market.

The deal, which has been approved by the companies' boards, is expected to close in the first quarter of 2023.
Taboola plans to host a meeting on Dec. 30 to seek shareholders' approval.

Taboola, which went public through an about $2.6 billion blank-check merger in 2021, has lost 75% of its market value this year, as of last close. (Reporting by Yuvraj Malik in Bengaluru; Editing by Sherry Jacob-Phillips and Devika Syamnath)