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Twitter Said to Agree to Buy TapCommerce for $100 Million

July 1 (Bloomberg) -- Twitter Inc. agreed to buy mobile-advertising company TapCommerce, seeking to make more money outside of its main microblogging service by expanding promotions on smartphones and tablets.

Twitter will pay almost $100 million to acquire TapCommerce, according to a person with knowledge of the matter. TapCommerce targets people on their mobile phones or tablets with ads for things they’ve already expressed interest in buying, urging them to complete the purchase.

Twitter, which has faced slowing user growth for its main application, has been acquiring companies to expand the potential audience for its advertisers. The San Francisco-based company bought MoPub Inc., an exchange that can distribute advertisements on more than 1 billion mobile devices, in October. TapCommerce will be able to send ads to more than 50,000 mobile applications, according to Richard Alfonsi, Twitter’s vice president of global online sales.

The acquisition will give advertisers “access to additional off-Twitter inventory and buying opportunities,” Alfonsi said in an interview yesterday. “It’s another step in this bigger vision we’ve started to put together about mobile advertising.”

He declined to comment on the terms of the deal. Twitter’s deal to buy MoPub for $350 million was its biggest acquisition to date.

User Growth

Twitter’s struggle to keep up the pace of user growth has led to several changes in the company’s leadership, and was seen as one of the reasons for the departure of Ali Rowghani, who resigned as chief operating officer last month. Alexander Roetter, who had advertising experience, was appointed as the new head of engineering at Twitter in May.

In the latest quarter, advertising sales generated $220 million of Twitter’s revenue of $243 million. Twitter’s shares have declined 36 percent so far this year, amid concerns that the company won’t be able to boost growth in sales and earnings.

TapCommerce, based in New York, was backed by Bain Capital, RRE Ventures, Eniac Ventures, Metamorphic Ventures and NextView Ventures.

“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,” Brian Long, chief executive officer of TapCommerce, wrote in a blog post yesterday.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

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