What happened

Shares of Aurora Mobile (NASDAQ:JG) surged on Friday after the mobile software developer announced a partnership with rapidly expanding TikTok rival Kuaishou Technology. By the close of trading, Aurora Mobile's stock price was up 25% after rising as much as 176% earlier in the day.  

So what

Aurora Mobile will work with Kuaishou to boost its advertising monetization efficiency. Essentially, Aurora Mobile will use its artificial intelligence (AI) and machine learning technology to help marketers better target their ads on Kuaishou's platform, thereby increasing their sales conversion rates while also lowering their costs.

Two people are shaking hands.

Investors cheered Aurora Mobile's partnership with Kuaishou. Image source: Getty Images.

 

Under the terms of the deal, Aurora Mobile will receive a share of the advertising revenue Kuaishou generates if advertisers use the labeling tools it provides. Better still, Aurora Mobile said the partnership could lead to "more extensive and deeper cooperation in the future" between the two companies.

Now what

Thanks in part to the torrid user growth of video-sharing platforms like Kuaishou and TikTok, the short-form video ad market is rapidly expanding. If Aurora Mobile can position itself as a key service provider to Kuaishou and a valuable ally to digital marketers, it, too, could enjoy rapid growth in the years ahead.

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