Israel’s IronSource reportedly in talks to merge with mobile monetization firm Supersonic

Israeli tech firm IronSource is reportedly talking about a deal to merge with Supersonic, which specializes in in-app monetization and user acquisition for mobile apps and games, according to a reliable source.

Israeli publications TheMarker and Haaretz reported on Sunday night that IronSource has acquired Supersonic in a stock deal as part of a plan to expand its presence in mobile app monetization. We’ve heard from a reliable source that no deal has been finalized yet but that talks with multiple parties are ongoing.

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Supersonic has been growing its presence in mobile monetization through rewarded video advertising, where a user can gain currency to buy things in a game or app by watching video ads.

IronSource has 550 employees, including 450 in Israel, as well as those in Beijing, San Francisco and New York. IronSource revenues are estimated at over $300 million a year and the company’s net profit at about $100 million a year. This is the seventh acquisition by IronSource.

Gil Shoham, chief executive of San Francisco-based Supersonic, said in an interview with GamesBeat earlier this year that more and more brands are sponsoring video ads which reward players with valuable gear via their favorite apps. And these ads are particularly effective. Click-through rates for the rewarded videos are around 20 to 35 percent, according to Supersonic. Finding such monetization alternatives to direct in-app purchases is increasingly important in the highly competitive mobile-game business, where a million rivals are competing for $30 billion in worldwide mobile-game revenues.

The video ads — which are provided by a number of big mobile ad networks on Supersonic’s platform — are a good way to keep people engaged and a great way for developers to drive revenue, said Shoham. They work because the ads are targeted at the interests of the gamer or app user. The video ads also spur more conversation between paying and non-paying users.

The company will be talking about the popularity of its opt-in rewarded videos at the Game Developers Conference this week in San Francisco. This growth has enabled Supersonic to triple its revenues every year and to grow to more than 200 employees.

Supersonic’s rewarded video platform is being used by publishers such as Electronic Arts, Kongregate, Gree, Pocket Gems, Pretty Simple, Social Point, and DeNA. At GDC, Supersonic’s booth will feature indie game developers showcasing their titles. Developers will show off their games for an hour or two on a rotating schedule.

We have sent a message to Supersonic asking for comment.