Twitter’s purchase of MoPub is its largest acquisition

Twitter has made its largest acquisition to date with the purchase of MoPub, a mobile advertising company, boosting expertise in its ad sales platform as it prepares to go public in coming months.

The deal will help automate ad buying on Twitter and broaden its partnership with traditional media companies. The acquisition is part of the messaging platform’s push to boost revenue in the run-up to an initial public offering.

MoPub helps advertisers to better target users and to execute it in real time, for example during live events. It will continue to allow agencies to buy ads across a large network of websites, not just Twitter, paving the way for an expansion of Twitter’s services beyond its own site for the first time.

“Mobile is obviously key to Twitter as a whole and to our advertising platform,” said Kevin Weil, Twitter’s vice-president for revenue products. Allowing advertisers to buy ads in real time, at the instant they are delivered to the app user, improves targeting and relevance for both brands and users, he said.

Revenue estimates for the company for year 2013 are around $300 million. Priced at 16 million Twitter shares, according to one person familiar with the matter, the deal could value MoPub from anywhere between less than $300 million and more than $400 million, based on Twitter’s share price in the highly illiquid secondary market.

MoPub serves 2 billion ads a day on sites including blogging platform WordPress, games publisher Ngmoco, and TuneIn, a radio app. The mobile advertising exchange had a revenue run rate of $100 million in May, 11 times the level during the same time the year before. The company’s products include the MoPub Marketplace, a real-time bidding exchange that helped advertisers bid for impressions the moment they became available.

Brian Blau, a research director at Gartner who studies social media, said that the purchase made Twitter a bigger player in online advertising. “It will help give them access to advertisers they don’t have yet,” he said.