Why Twitter's acquisition of MoPub could mean money for developers

Editor's Corner
Shane Schick

Apple's (NASDAQ:AAPL) App Store is still the place where developers go to make money from downloads, but it may not be too long before Twitter is the place they go for in-app advertising.

For the last week or so, most people have been watching the popular social service to see what might happen in the event of its initial public offering (IPO). It was almost easy to overlook what may turn out to be one of its most critical acquisitions: MoPub, a San Francisco-based firm which offers an ad hosting platform specifically for mobile publishers.

Most industry observers have agreed that while Twitter's purchase was by no means an obvious move, in many ways it makes total sense. Though it can still be accessed via desktop Web browsers, Twitter is about as "mobile-first" a service as they come. Monetization remains as challenging for the firm as it does for most indie developers, and yet the mobile ad space has never been hotter. With MoPub, Twitter immediately gains an advantage because its knowledge of its users' interests (based on who they follow, what they tweet, etc.) could allow ads delivered via MoPub to be far more targeted. This was best explained by Antonio Garcia, founder of a firm called AdGrok which was also sold to Twitter. As he said in a post on Medium:

"Overlaying an interest graph over desktop or mobile RTB inventory is sure to increase MoPub's monetization and place them among the first ranks (if they aren't already) of mobile inventory monetization. As a publisher, you shop for monetization the same way the guy who owns the building with the billboard on top does: by picking the advertiser or middleman who can maximally exploit that billboard you own. With Twitter's interest graph behind it, that maximal person will be MoPub more often than not."

In some ways, this comes at an interesting juncture in the ad mediation space. For example, I recently wrote about Google's decision to shut down AdWhirl, which had a popular offering similar to MoPub but which was more or less rolled into AdMob, the other service Google (NASDAQ:GOOG) owns. That left some developers scrambling to figure out how to ensure their ad revenue stream didn't come to a screeching halt.

Now that is has MoPub, Twitter could position itself as a real competitor to Google and other independents in this space like Smaato and Burstly. For the investor community, what will matter is how this brings greater revenue potential to Twitter alone, but developers will care more about how Twitter can bring more revenue to them. There is some indication the company is preparing to address that issue by hiring former Microsoft (NASDAQ:MSFT) exec Jeff Sandquist as its new head of developer relations.

Few people doubt that Twitter will have its IPO eventually. What almost no one suspects is that it could be an army of loyal app developers who make the company's success on the financial markets possible. --Shane