Twitter Inc (NASDAQ: TWTR) has just announced that they have reached an agreement to sell their mobile ad platform MoPub to the AppLovin Corporation for no less than $1.05 billion.
The company’s reason for selling their mobile ad network has to do with the fact that the social media platform wants to focus entirely on developing their own operated revenue products and services particularly on performance-based marketing and advertising, services for small and mid-size businesses, and multiple commerce projects.
Twitter’s CEO had this to say:
“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.” Jack Dorsey
Ned Segal the social media platform CFO (chief financial officer) has stated that this sale would help their company recover from short-term revenue loss with the overall goal of doubling their overall total annual revenue from $3.7 billion in 2020 to over $7.5 billion in 2023.
The sale does make some sense, considering that MoPub was only able to generate $188 million in revenue for the past year. A small drop in the bucket compared to their multi-billion revenue goals of 2023.
But since Twitter has bought the MoPub ad network in 2013 for about $350 million, they have still earned quite a lot of money from this sale.
We have yet to know for sure how this transaction might impact Twitter’s future financials, but we’ll get a clearer picture on this on Oct. 26 when Twitter will report its third-quarter financial results.
The agreement also states that Twitter will provide AppLovin with “certain services” to make the transfer as smooth as possible for publishers and advertisers using MoPub.
When Apple Inc has announced its new privacy notification changes to iOS 14.5, many digital networks such as Facebook Inc and Twitter expressed some concern over how this change might impact their revenue.
However back in July Twitter has reported that the financial impact of Apple’s new changes has been smaller than they have originally expected.