Twitter Buys Niche to Tap Advertising Industry - Analyst Blog
Twitter (TWTR) recently revealed that it has acquired Niche Project Inc., a social media advertising network startup based in New York. The financial terms of the deal were not disclosed.
Niche, started in 2013, acts as a platform for bringing together content creators and advertisers. This start-up was formed to fill a gap in the advertising industry by connecting budding content creators on social media platforms like Google Inc.’s (GOOGL) YouTube, Instagram and also on Twitter’s short-form video sharing service, Vine, with advertisers desiring to address a similar audience.
Since its inception, the company has been gaining popularity by creating a win-win situation for both advertisers and creators. The social media ad network now has over 6,000 content creators and an impressive number of advertisers making it a valuable asset for Twitter. Additionally, the company also offers other innovative tools including data analytics services to provide crucial insights to its users.
Synergies for Twitter
The deal is expected to benefit Twitter by connecting its advertisers to innovative content creators who have the talent to create interesting videos that gain popularity on platforms like Vine and YouTube. Revenues from advertising have been the primary source of income for Twitter so far. Moreover, this deal comes at an opportune time for the company when its mobile advertising revenues are rising phenomenally. Twitter is well positioned to benefit from this higher spending due to its innovative product portfolio that continues to attract advertisers.
Niche has already started working on Twitter’s brand strategy and is aiding the micro-blogging network to provide services to some of the leading global brands. In fact, even prior to the acquisition, Niche had been working closely with Twitter and Vine for the last one year.
In Conclusion
This deal marks another of Twitter’s efforts to enhance its user engagement, thereby pushing up the number of active users. Of late, Twitter has been taking a number of strategic initiatives like the addition of new products and services to attract users and drive growth.
Most recently, Twitter reached a deal with Google per which Google users will be able to see Twitter messages in search results in real time. In January, the company included a new feature on its site that enables its users to create and edit videos on the platform itself. The company also started a new advertising distribution program to display tweet-based ads, known as Promoted Tweets, on third-party mobile apps and websites.
Such initiatives are expected to enable Twitter to solidify its position in the social networking community, especially in the wake of intensifying competition from technology giants like Facebook, Inc. (FB) and Google.
Currently, Twitter has a Zacks Rank #3 (Hold). A better-ranked stock that can be considered at the moment is ClickSoftware Technologies Ltd. (CKSW), sporting a Zacks Rank #1 (Strong Buy).
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