Twitter, the popular micro blogging company, agreed to purchase MoPub, a mobile advertising exchange startup for $350 million in stock prior to its anticipated initial public offering (IPO) next year.

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MoPub is so far the largest acquisition of Twitter

MoPub is so far the largest acquisition of Twitter. The transaction is part of the micro blogging company’s strategy to boost its advertising revenue by making its ad service more efficient and simple for advertisers.

In a blog post, Twitter’s vice president of revenue product, Kevin Weil said, “MoPub’s technology allows mobile application publishers to manage their inventories and optimize multiple sources of advertising such as direct ads, house ads, ad network, and real-time bidding through MoPub Market Place.”

According to Weil, Twitter is in the crossroads of two major trends in the advertising industry: consumers’ rapid shift towards mobile, and the industry’s shift to programmatic buying. He said the acquisition of MoPub will allow the micro blogging company to further push the ongoing trends in advertising for the benefit of agencies, advertisers, and consumers.

Weil added that MoPub’s philosophy of providing transparency to advertisers and publishers aligns with the values of Twitter, and its mobile ad exchange is one of the leading in the advertising industry.

Jim Payne, CEO of MoPub said, “Like MoPub, Twitter has been mobile first since their inception, which makes our two companies a natural match.”

Twitter plans to enhance the core business of MoPub

Twitter plans to enhance the core business of MoPub, and use its technology to create real-time bidding of ads in its own platform in order for advertisers to automate and scale their purchases easily.

“We think there is a key opportunity to extend many types of native advertising across the mobile ecosystem through the MoPub exchange,” said Weil.

In an interview, Weil further stated, “We look at it as a big bet on the mobile ecosystem. It’s growing incredibly quickly. We think mobile advertising is in the early stages, and Twitter and MoPub together give us the opportunity to help drive what mobile advertising becomes.”

Twitter aims to generate $1 billion revenue next year. The company is expected to submit its application for an IPO early in 2014. People familiar with the situation said that the management of the company initially discussed its plan to take the company public with securities firms. According to them, Twitter is waiting for its third quarter financial results before making a final decision whether to file for an IPO with the Securities and Exchange Commission (SEC) this year or in 2014.