• by Mark Walsh  @markfwal, September 9, 2013

Terms of the deal were not disclosed, but TechCrunch -- which broke news of the deal -- reported that Twitter is buying MoPub for $350 million in stock, citing people familiar with the transaction. It also indicated that Twitter beat out other bidders for MoPub including mobile ad network Millennial Media.

Launched three years ago by a team of AdMob and Google veterans, MoPub serves and optimizes ads across Android and iOS apps and since 2011 has operated a mobile RTB marketplace. CEO Jim Payne in May told TechCrunch the company had reached a $100 million revenue run rate and was handling 2 billion ad auctions a day.

Twitter could harness MoPub’s programmatic ad technology to enhance its mobile ad revenues as the company gears up for an expected initial public offering in 2014. The Wall Street Journal in June reported that Twitter on most days is now making more from ads running on its service on mobile devices than on the desktop.

Explaining the rationale behind the MoPub acquisition, a Twitter blog post today pointed to two major trends: the shift toward mobile usage and the rise of programmatic trading. “Twitter sits at the intersection of these, and we think by bringing MoPub’s technology and team to Twitter, we can further drive these trends for the benefit of consumers, advertisers, and agencies,” it stated.

Specifically, the company said it would use MoPub’s technology to build out its own RTB platform for both mobile and the desktop, “so advertisers can more easily automate and scale their buys,” stated the Twitter post. eMarketer projects that U.S. mobile ad spending will nearly double this year to $8.5 billion, although Twitter will claim only 3.5% share of that total, well behind larger rivals like Facebook (15%) and Google (52%).

Both Facebook and Google already run their own large ad exchanges in the form of Facebook Exchange and the DoubleClick Ad Exchange, respectively.

For its part, MoPub assured developers and publishers that it would also continue to run its mobile ad platform, as it has been following the Twitter acquisition. “In fact, it will be strengthened. Twitter will invest in our core business and we will continue to build the tools and technology you need to better run your mobile advertising business,” wrote Payne in a separate blog post.

Under the deal, the MoPub CEO will take on the title of VP, exchange, and will report to Adam Bain, president of global revenue at Twitter. 

MoPub under Payne had raised $18.5 million in venture capital from investors including Accel Partners, Jafco Ventures and Harrison Metal Capital.

The push toward programmatic buying in mobile, while still at a nascent stage, was also as one of factors in Millennial Media’s recent purchase of mobile ad network Jumptap for an estimated $225 million. Through that deal, Millennial aims to focus more on helping pubishers better monetize their apps and mobile sites via an automated buying market.