Twitter Inc announced on Wednesday, October 6, that it has secured a deal to sell its mobile advertising network MoPub to AppLovin Corporation, a California-based game developer and ad-tech company, for $1.05 billion in cash.
Aligning with the company’s goal to double Twitter’s revenue to $7.5 billion by 2023, the sale of MoPub will be put into building revenue-generating and promoting growth on Twitter’s platform, the company stated in a release.
Twitter CEO Jack Dorsey stated that this transaction between the two companies will increase Twitter’s focus and confidence in abiding by their revenue product road map, which, according to Dorsey will result in accelerating Twitters ability to “invest in the core products that position Twitter for long-term growth and best serve the public conversation.”
After the announcement, AppLovin Corporation shares surged more than 8 per cent in extended trading on Wednesday, while Twitter shares rose more than 2 per cent. “The sale of MoPub is all about increased focus, redirecting our resources and delivering faster growth in a number of key areas,” Bruce Flack, Twitter’s revenue product lead, said in a press release following the announcement.
Twitter had initially bought Mopub back in 2013 for $350 million. The company also stated that MoPub helped Twitter bring in around $188 million in revenue last year, amounting to nearly 5.9 per cent of the company’s advertising revenue in 2020 and a little more than 5 per cent of its total sales for the year.
To increase revenue and gain more traction for the microblogging platform from the younger demographic, Twitter has been rapidly rolling out many features over the last year and exploring more options such as super follows and ticketed spaces to allow more content creators to join the platform.