Twitter, on the road to an IPO, has been buying or implementing ways to make money as fast as it can. Now, the micro blogging juggernaut has acquired mobile advertising exchange MoPub.
MoPub, which says its platform serves two billion ads daily and that its Marketplace is the largest real-time bidding exchange for mobile apps, has reportedly been purchased for US$ 350 million in stock. One rumor is that Twitter’s winning bid triumphed over competing ones from such suitors as ad network Millennial Media. MoPub CEO Jim Payne is slated to become vice president of exchange at Twitter.
Real Time Bidding for Twitter Ads
In a statement on its website, MoPub indicated that its relationship with multiple publishers “will not change,” and that Twitter “will invest in our core business.” For its part, Twitter VP for Revenue Product Kevin Weil wrote on the company’s blog that “the major trends in the ad world right now are the rapid consumer shift toward mobile usage, and the industry shift to programmatic buying” of ads. He added that Twitter “sits at the intersection of these.”
MoPub, which has about 100 employees, allows application publishers to manage their inventory and get the highest-paying ads from a variety of sources, including direct ads, house ads, ad networks and real-time bidding. The company was started three years ago by three veterans of mobile ad network AdMob, which Google owned, and MoPub has raised more than US$ 18 million from such venture capital firms as Accel Partners.
Weil wrote that MoPub’s technology will be utilized to provide real-time bidding (RTB) in the Twitter ads platform “so our advertisers can more easily automate and scale their buys.”
Getting Ready for the IPO
While MoPub will also help grow Twitter’s overall revenue, a key question is how other publishers’ involvement in MoPub fits into Twitter’s overall long-term strategy, as this is Twitter’s first effort to sell ads outside of its platform. Most Twitter-watchers expect the company to file for an IPO sometime next year, possibly in the first few months of the new year, and all of its moves are being reviewed as steps to increase its financial health and competitive position. Research firm EMarketer estimates that Twitter will have about US$ 580 million in ad revenue in 2013, reaching more than a billion dollars by 2015.
Twitter’s ad revenue from its mobile platform has grown larger than revenue from its desktop version, so mobile exchange technology could help to facilitate its revenue growth. Among many other fronts, the company is also working to develop promoted tweets that are geo-targeted to mobile devices, and it could launch such an initiative sometime this year.