Twitter on Wednesday announced its decision to sell its MoPub mobile advertising network to mobile game developer AppLovin for $1.05 billion in cash.
Twitter said it made the decision to sell MoPub in order to accelerate the development and growth of its owned and operated revenue products. Twitter said the sale of MoPub is in line with its stated goal of reaching $7.5 billion in revenue by the end of 2023.
Shares of AppLovin were up more than 9% in after-hours trading on Wednesday. Twitter shares were up nearly 2%.
“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 CEO Jack Dorsey said in a statement.
MoPub accounted for $188 million in revenue for Twitter in 2020, the company said on Wednesday. That represents nearly 5.9% of the company’s 2020 advertising revenue and a little more than 5% of its total revenue in 2020.
Twitter said it would provide additional details on the estimated financial impact of the deal when it reports its third-quarter earnings on Oct. 26.
The MoPub network is used by 45,000 mobile apps and reaches 1.5 billion addressable users, according to AppLovin’s announcement of the deal. The deal is expected to close in 2022, AppLovin said.
“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.”
AppLovin’s business is split between games, which make much of their money from the sale of virtual items, and marketing tools that other game developers use for app discovery and promotion.
Founded in 2011, AppLovin was initially focused on helping mobile apps get discovered and make money. In 2018, the company raised $2 billion from KKR to expand its business into game development, largely through acquisitions.
Twitter purchased MoPub for about $350 million in stock in September 2013 just before the company was set to make its debut on the public markets. The purchase was intended to bolster Twitter’s ability to generate revenue from mobile ads.
This story is developing.