Twitter Buys Mobile Ad Platform MoPub

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Twitter said it will use MoPub, founded by three AdMob veterans, to expand its presence in the mobile advertising world while adding real-time ad targeting to its own site

Twitter on Monday confirmed that it has acquired mobile advertising exchange MoPub, as the company seeks to build up its revenue-generating capabilites ahead of an expected stock market flotation.

The companies did not confirm the sale price, but several reports citing people familiar with the matter valued the deal at 16 million Twitter shares, or from $300m (£190m) to more than $400m, based on a share price of between $20 up to nearly $30 on the secondary market.

Real-time bidding

MoPub was founded three years ago by Bryan Atwood, Nafis Jamal and Jim Payne, the company’s chief executive, all three of whom were previously colleagues at AdMob, the mobile advertising network bought by Google for $750m four years ago, and which is now MoPub’s biggest competitor.

The company’s services include MoPub Marketplace, which offers real-time bidding on advertising impressions, a feature advertisers can use for instance during live events.

MoPubTwitter said it will continue to invest in MoPub’s core ad exchange business, while also using MoPub’s technology to improve Twitter’s ad targeting capabilities.

“We also plan to use MoPub’s technology to build real-time bidding into the Twitter ads platform so our advertisers can more easily automate and scale their buys,” said Twitter’s vice president for revenue products, Kevin Weil, in a blog post. “The two major trends in the ad world right now are the rapid consumer shift toward mobile usage, and the industry shift to programmatic buying. Twitter sits at the intersection of these.”

MoPub serves about 2 billion ads per day on websites including WordPress, Flixter, Ngmoco and OpenTable. MoPub said in May it had reached a revenue run rate of $100m, 11 times the level a year previously.

Mobile ad expansion

Payne, who will become Twitter’s vice president of exchange, compared the deal to Google’s acquisition of DoubleClick, which gave Google an advertising network with a large-scale presence across the web. As in the Google-DoubleClick deal, MoPub will continue to allow ad agencies to buy ads across a wide range of websites, not just Twitter.

The companies are a “natural match” for each other because they both focus on mobile, Payne said in a statement.

Twitter is expected to make more than $300m from mobile ads in 2013, or more than half of its global advertising revenues, according to EMarketer. The company has been focusing on revenue generation from advertising with features including sponsored tweets and tailored ads ahead of an expected public stock offering, which could arrive as soon as early 2014.

A new study by Comscore and JumpTap found that more than half of all time spent on the Internet is now through a mobile device. The study found that total US adult Internet usage nearly doubled in the past three years from 451 billion minutes in February 2010 to 890 billion minutes in February 2013, largely driven by an increase in mobile Internet usage.

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