AppLovin transforms into “a pure advertising platform” by divesting its Apps business

AppLovin is making a decisive move to solidify its position as a dedicated advertising technology platform. The company has announced its plan to fully divest its remaining gaming studios, marking the end of its in-house app development business. With a $900 million asking price for its gaming division, the transaction is expected to be completed by the next quarter.

The decision aligns with AppLovin’s long-term vision of prioritizing its AI-driven advertising solutions. For years, the company has emphasized the importance of its software platform, and now, it is taking a bold step to focus exclusively on ad technology. CEO Adam Foroughi highlighted the transformation, stating, “Seven years ago, we started acquiring gaming studios to refine our early machine learning models, which played a crucial role in developing the AI behind our Axon platform.”

Axon, AppLovin’s proprietary AI-powered advertising engine, leverages predictive machine learning to optimize ad placements and maximize conversion rates. With the technology now operating efficiently, the company is redirecting its focus beyond gaming, tapping into the broader advertising ecosystem.

Traditionally, AppLovin’s core business revolved around helping mobile game developers monetize through cross-promotion. However, a recent pilot program targeting e-commerce advertisers has demonstrated significant potential. By enabling brands to promote their products and services within mobile apps, AppLovin is positioning itself as a viable alternative to major advertising platforms like Meta. The company estimates that its platform reaches over a billion mobile gamers daily, with engagement levels comparable to social media networks.

To scale its ad business and attract a wider range of advertisers, AppLovin is prioritizing automation. A key component of this strategy is the expansion of its self-serve ad buying platform. The company acknowledges that to replicate the success of major ad tech players, it must provide seamless and efficient tools for advertisers.

“Our current systems are still evolving and lack full self-service capabilities necessary for handling large-scale growth,” Foroughi explained. As a result, automation will be a top priority in 2025, ensuring that advertisers can manage campaigns effortlessly without requiring extensive human oversight. The ultimate goal is to build a completely automated ad platform capable of scaling without additional manual intervention.

As part of its transition, AppLovin has been streamlining its operations. Over the past year, the company has implemented workforce reductions, including laying off 120 employees in 2024 and another 89 at the beginning of 2025. These changes included the departure of the CEO of Machine Zone, a gaming studio AppLovin acquired in 2020, which will be included in the upcoming divestiture.

Despite the restructuring, AppLovin’s financial performance remains strong. The company reported Q4 revenue of $1.37 billion, marking a 44% year-over-year increase. Its total revenue for 2024 reached $4.7 billion, reflecting a 43% annual growth rate. Foroughi emphasized the importance of aligning resources with core opportunities, stating, “Since taking on oversight of HR, my focus has been identifying areas of the business that don’t align with our organic growth opportunities and making strategic adjustments to concentrate on what truly drives our success.”