Twitter buys mobile ad retargeting startup TapCommerce

Steven Loeb · July 1, 2014 · Short URL: https://vator.tv/n/37d3

Deal was reportedly worth around $100 million

It was just earlier today that I was talking all about how important mobile advertising is to Twitter. Then, lo and behold, the company makes the point for me!

The company went and bought mobile ad retargeting startup TapCommerce, it was revealed in a blog post on Tuesday. 

No financial terms of the deal were disclosed, but a report from ReCode, who broke the news of the acquisition earlier in the day, pegs it at roughly $100 million. Vator has reached out to Twitter to confirm the price and we will update if we learn more.

As you probably suspected, Twitter sees the acquisition as part of its larger mobile advertising strategy, which has also included the purchase of advertising exchange MoPub last year, and has also included mobile app install ads, which launched globally on Tuesday.

"Since the announcement of our acquisition of MoPub last September, we’ve been laying out our vision for how advertising across the mobile ecosystem can work better for marketers, app developers, and (most importantly) users," Richard Alfonsi, VP, Global Online Sales at Twitter, wrote.

"We’re now excited to announce one more important piece of this vision: we’ve agreed to acquire TapCommerce, a leader in mobile retargeting and re-engagement advertising."

TapCommerce is a service that enables real-time programmatic mobile ad buying across multiple exchanges. By adding TapCommerce’s capabilities, Twitter said, it "will be able to offer mobile app marketers more robust capabilities for app re-engagement, tools and managed service solutions for real-time programmatic buying, and better measurement capabilities."

Advertising, and mobile, have become extremely important to Twitter. Of the $250 million Twitter made in revenue in the first quarter of 2014, advertising accounted for $226 million. In all, mobile advertising revenue was approximately 80% of total advertising revenue. Adding TapCommerce helps Twitter gain in both areas.

From the point of view of TapCommerce, meanwhile, that company gets the resources of a company of Twitter's size behind it. In a separate blog post, Brian Long, CEO and co-founder of TapCommerce, wrote about why his company and Twitter such a good match.

"Our focus on creating engaging brand experiences for mobile consumers aligns perfectly with Twitter’s product and core values, making TapCommerce a natural fit in Twitter’s expanding mobile advertising stack," he said.

While both Twitter and TapCommerce seem eager to join forces, that is not happening just yet; Long made it clear that TapCommerce, will, for the time being at least, remain independent.

"For our existing customers, your TapCommerce experience will not change. Being a part of the Twitter team will allow us to dedicate more resources to developing our product and expanding our services, so that you can continue to deliver even more value from your campaigns," he wrote.

Founded in 2012, TapCommerce reaches over 50,000 apps. The company has raised nearly $12 million in funding, including $10 million in Series A funding November of last year. 

Investors in the company include Bain Capital Ventures, RRE Ventures, Nielsen Ventures, Metamorphic Ventures, Eniac Ventures, and Nextview Ventures. 

(Image source: tapcommerce.tumblr.com)

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What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests. 

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes. 

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet. 

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.

 

What's next for Twitter?

We continue to focus on building a product that provides value for users. 

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.