Twitter has made its biggest acquisition till date buying mobile advertising exchange MoPub for an undisclosed amount. However, according to technology blog TechCrunch, the tweeting firm paid $350 million in stock for the start-up. The deal also marks the first time when Twitter has made efforts to sell ads beyond its own service.
Motive behind the deal
The acquisition is in line with Twitter’s strategy to make it easier to buy ads on its service, helping it to boost advertising revenue. The deal, also, strengthens the earlier reports claiming that Twitter is planning to launch its own mobile ad exchange.
Explaining the motive behind the deal, Kevin Weil, Twitter’s vice president of revenue product, said in a blog post that ad world is witnessing two major trends, first, shift of users towards mobile and second, “industry shift to programmatic buying.” According to the executive, Twitter is placed at the “intersection” of both these trends, and a combination of MoPub’s technology and Twitter’s team will, further, benefit consumers, advertisers, and agencies.
MoPub, which serves 2 billion ads a day, facilitate agencies to buy ads from a variety of sites. The advertising exchange also helps the agencies to gain more from the ads by targeting users in real time.
Deal sends strong signal to prospective investors
Twitter initial public stock offering, which many have been expecting to come in early 2014, has been the most anticipated IPO since Facebook. The acquisition sends a strong signal to prospective investors that the company is further looking to boost its solid growth story.
According to EMarketer, for 2013, Twitter is expected to generate revenues of $583 million in advertising sales and is expected to breach the $1-billion mark by 2015. With Twitter, investors can rest the mobile concerns they had with Facebook at the time of its IPO, as Twitter already gets more than half of its revenues from mobile advertising.
Mobile adtech industry in consolidation phase
The deal further highlights the consolidation of the mobile adtech landscape. Recently, Millennial Media acquired Jumptap. Many experts feel that mobile adtech space is crowded with too many players, providing similar services to advertising clients. And now, the time is ripe for some of the companies to dominate the market, make acquisitions or leave the industry all together.