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Twitter sells MoPub, its real-time exchange for advertising in apps, to AppLovin. The buyer pays $ 1.05 billion in cash for this. The closing is scheduled for 2022. This emerges from the communications from the two companies on Wednesday evening. Twitter acquired MoPub in 2013 in exchange for its own shares.
The block of shares was then valued at approximately $ 350 million. Twitter was not yet listed at the time. Now Twitter is runningthat the sale of MoPubs will improve the focus on the core business.
Twitter can use the sales proceeds well as it has to pay $ 810 million in the fourth quarter to avert a class action lawsuit by Twitter shareholders. The shareholders had accused the management of misleading them in 2015 with incorrect user retention figures, but of having sold shares themselves at the same time. The judicial settlement should avoid a complex process without Twitter having to admit misconduct.
AppLovin expects growth
AppLovin already operates a real-time advertising exchange for advertising in apps. It is called MAX and is to be expanded to include MoPub users, MoPub providers and some MoPub features. In addition, AppLovin offers advertisers support with the design of mobile advertising, as well as with the measurement of the advertising range and the detection of fraud in app advertising.
There is also a service that helps app operators to publicize their app. AppLovin is based in Palo Alto and has been listed on the stock exchange since April. The company can cover the purchase price from its cash balance and an open line of credit, but the management would prefer to incur new debts.
Last year MoPub made $ 188 million in annual sales – about eight euro cents for each of the 1.5 billion devices that advertisers can reach via the advertising exchange. Twitter has previously booked these sales under “data licensing and other sales”.
AppLovin’s management believes the MoPub acquisition will increase sales by roughly a quarter of a billion dollars in 2023. AppLovin’s share price rose more than four percent after the hours. The company’s market value is now close to the $ 30 billion mark.
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