Technology giants such as Google Yahoo and Facebook thrive on advertising as their main revenue model. Brands, businesses and companies worldwide rely on them to reach out to audience worldwide.
Twitter is no exception.
The social media giant has long been focusing on building up a business selling advertisements that blend into the flow of its 140-character messages. Now it plans to sell similar ads on other companies’ mobile apps too: Earlier this week, Twitter announced that it had acquired mobile ad technology firm MoPub, for a rumoured $350 million.
MoPub was founded three years ago by Bryan Atwood, Nafis Jamal, and CEO Jim Payne, who previously worked together at Google-owned mobile ad network AdMob. The company raised about $18.5 million in funding, and focused on multiple products, which include the MoPub Marketplace. The marketplace allow advertisers to bid in real time, in an automated fashion, for ad space on mobile apps.
What does it mean in layman term? If a smartphone user is searching for tennis shoes, for example, a Nike ad might appear. Competitive bidding tends to boost ad rates and revenue for companies like MoPub and for sites and apps that host the ads. As a result, advertisers are more willing to pay for more relevant ad placement.
Back in May, the company said that it has reached a $100 million revenue run rate. A source familiar with the business said the company has about a 25 percent gross margin. Some of MoPub’s customers include WordPress, Flixster, Ngmoco, and OpenTable.
The global tech community seems to speculate that the company is gunning for a public offering soon.
Back in September 2011, Costolo has previously said the San Francisco-based company’s management is not focusing on an IPO.
“We now have what can only be referred to as a truckload of money in the bank. We want to be able to remain independent and do things on our own terms and not worry about being a public company.”
Of course, that was 2 years ago.
Dick Costolo, CEO of Twitter
Fast forward to April this year, Twitter co-founder Jack Dorsey, who sits on the board and is CEO of Square, has told Bloomberg that the company is “not even thinking” of an IPO.
That was 5 months ago.
According to Time, Twitter seems to be sending clearer signals of an impending IPO now. There are also rumours reported by Bloomberg that Twitter is currently in talks with banks about handling a public offering. A recently posted a job listing on LinkedIn for a financial reporting manager to handle regulatory filings seems to tip its hand further.
Perhaps more telling, Twitter has also been buying up tech startups in a variety of fields, wrote Time.
Speculation of Twitter’s IPO has been going around major media outlets globally, some claiming that the IPO might reach $15 billion.
Continued growth in mobile has been pushing these names higher. […] Twitter has been no slouch about monetization. Revenues are expected to go from $582 million this year to $950 next year, with much of that revenue coming from smartphones and tablets. Twitter also has the advantage of learning from other high-profile social IPOs. The company knows not get too aggressive with the pricing. As seen with Facebook, pricing too high can result in a big hit to a company’s reputation if the price then plunges.
USA Today also made an observation of Twitter’s CEO Dick Costolo, whom delivered a quick speech earlier at TechCrunch Disrupt without taking any further Q&A, suggesting that Twitter may be gearing up for a quiet period going into an IPO.
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