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Twitter moves closer to IPO by buying mobile ad start-up MoPub

September 09, 2013|By Jessica Guynn
  • Dick Costolo, chief executive of Twitter, speaks at the TechCrunch Disrupt conference in San Francisco.
Dick Costolo, chief executive of Twitter, speaks at the TechCrunch Disrupt… (David Paul Morris / Bloomberg )

SAN FRANCISCO -- Ahead of the most anticipated initial public stock offering since Facebook, Twitter bought mobile advertising exchange MoPub, its largest acquisition to date.

The deal was part of Twitter's ongoing effort to make it simpler and easier to buy ads on its service and grow its advertising revenue.

MoPub helps agencies buy ads across a broad swath of websites and make those ads more relevant by targeting users in real time. It's the first time that Twitter has made a move to sell ads beyond its own service.

According to technology blog TechCrunch, Twitter paid $350 million in stock for the start-up, which serves 2 billion ads a day. Twitter Chief Executive Dick Costolo spoke about leadership at the TechCrunch Disrupt conference on Monday but did not mention the acquisition.

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"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, and we think by bringing MoPub’s technology and team to Twitter, we can further drive these trends for the benefit of consumers, advertisers, and agencies," Kevin Weil, Twitter's vice president of revenue product, said in a blog post.

Twitter is expected to file for an IPO as soon as early 2014 -- and it must show prospective investors a solid growth story.

Research firm EMarketer estimates that Twitter will generate $583 million in advertising sales this year. It's not forecast to cross the $1-billion threshold until 2015, when EMarketer expects Twitter to rake in $1.3 billion in ad revenue.

But more than half of Twitter's revenue already comes from mobile advertising, eliminating one of the main concerns that investors had about Facebook at the time of its IPO.


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