Twitter has announced plans to sell its MoPub mobile advertising network to AppLovin for $1.05 billion in cash.
MoPub allows companies to keep track of ad inventory in real time.
Announcing the deal, Twitter CEO, Jack Dorsey said it will help position the company for long-term growth to serve the public better.
Also, Twitter Chief Financial Officer Ned Segal said, “The sale of MoPub positions us to concentrate more of our efforts on the massive potential for ads on our website and in our apps.”
Twitter’s board unanimously approved the sale of MoPub to AppLovin.
AppLovin:
AppLovin is game developer and an ad-tech company and became operational in 2011.
The company only recently went public in April, 2021.
The company initially focused its services on helping mobile apps get discovered and generate revenue.
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However, in 2018, the company scaled the vision after it raised $2 billion from KKR.
It raised the fund to expand its business into game development and its strategy is largely through acquisitions.
As a mobile gaming company, AppLovin has a portfolio that includes more than 200 free-to-play mobile games.
Examples of the games include Word Connect, Slap Kings and Bingo Story.
Meanwhile, following the deal announcement, AppLovin shares jumped more than 8% in extended trading on Wednesday.
AppLovin has a market cap of close to $29 billion as of Wednesday’s close.
Similarly, Twitter shares equally went bullish, rising more than 2%.
Why Twitter is selling the ad unit:
According to Twitter, it would generate enough funds to meet its set goal of reaching $7.5 billion in revenue by the end of 2023.
Jack Dorsey explained this thus:
“This transaction increases our focus and demonstrates confidence in our revenue product roadmap, accelerating our ability to invest in the core products that position Twitter for long-term growth and best serve the public conversation.”
Twitter bought MoPub for about $350 million in September 2013.
However, through MoPub, Twitter generated $188 million in revenue in 2020.
According to the company, that represents nearly 5.9% of Twitter’s 2020 advertising revenue and a little more than 5% of its total sales for the year.
Moreover, Twitter has said it would reveal the estimated impact of the deal when it reports its third-quarter earnings on Oct. 26.
Users of the ad unit:
In a statement by AppLovin, it said over 45,000 mobile apps use the Twitter MoPub network.
Also, it said the network reaches 1.5 billion addressable users.
“We are excited by the opportunity to grow the AppLovin platform and further enhance our publisher monetization tools through this strategic transaction,” said AppLovin CEO Adam Foroughi in a statement. “We welcome the MoPub team and together we will work diligently to combine the best of MoPub into the AppLovin software platform.”
Meanwhile, The deal is expected to close next year.
Implication:
This deal will surely help Twitter attain its financial goal.
It will also result in better services to the people.
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