Twitter purchase signals growing importance of data tracking

Twitter Inc. said Tuesday it is acquiring social media analytics provider Gnip Inc., a move one analyst said could cause trouble for other companies that analyze and monetize the social network’s data. Seth Grimes, a New York-based independent analyst with expertise in online analytics, said the deal makes sense for Twitter, which picks up a key player in the industry that has sprung up to take advantage of the reams of data produced by social media sites. " gives them direct control over how their data is monetized," Grimes said in a phone interview on Tuesday. "Since the beginning, Twitter has offered access to their data on an ad hoc basis. But to get the full stream you had to go through a small number of companies, of which Gnip was one. Now they'll be able to control how their data is acquired and used much more directly." Grimes said the purchase of Gnip, which packages and resells data from more than a dozen other websites besides Twitter, could have an impact on other data providers that have purchased a licence to access what he called the "Twitter fire hose," a reference to all of the data from millions of tweets per day. He cited Topsy, a social media analytics company purchased by Apple Inc. in December 2013 that also takes advtantage of the Twitter fire hose, as an example of a potential challenge. "What this does is put Twitter itself in direct competition with companies," he said. Grimes said the control over data provided by the purchase of Gnip, which was founded in Boulder, Colo., in 2008, will allow Twitter to "wring more bucks" out of its information, and could signal a move by the company into providing analytical services as a cornerstone of its business. "Having effective search, filtering and analysis technology is one of the routes to making the data more valuable," he said. "I would expect that Twitter will make more acquisitions along the lines of enriching the value of their data along the lines of data analytics or data integration." Jana Messerschmidt, Twitter’s vice-president of global business development, said in a Tuesday posting on the company’s website that Twitter wanted to make its data “even more accessible” for their customers. “As Twitter has grown into a platform that delivers more than 500 million Tweets per day, Gnip has played a crucial role in collecting and digesting our public data and delivering the most essential tweets to partners,” she wrote. “We believe Gnip has only begun to scratch the surface. Together we plan to offer more sophisticated data sets and better data enrichments, so that even more developers and businesses big and small around the world can drive innovation using the unique content that is shared on Twitter.” Analysts have criticized Twitter for tepid user growth, its reliance on advertising dollars for revenue and a lack of a clear business plan since its November 2013 initial public offering, according to media reports around the time of the company's first quarterly report as a public company in early February. Gnip specializes in social data, the growing field of analyzing the publicly available postings on the social networks as Twitter, Tumblr Inc. and Facebook Inc. for anything from predicting flu outbreaks to collected feedback for the latest blockbuster movie. On its website, Gnip claims to serve customers in more than 40 countries, including Fortune 500 companies such as IBM, Adobe and Salesforce. Unlike competitors in data analytics, such as Datasift.com, Grimes said, Gnip doesn't provide extensive data analysis but rather "regularizes" the data and packages it together for clients that want information on a specific topic, such as a new consumer product, or a specific period of time. In a posting on the company’s website Tuesday, Gnip CEO Chris Moody said “combining forces” with Twitter would allow his company to provide “new offerings” to its data customers. “We’ll be able to support a broader set of use cases across a diverse set of users including brands, universities, agencies, and developers big and small,” he wrote. “Joining Twitter also provides us access to resources and infrastructure to scale to the next level and offer new products and solutions.” Gnip claims to be Twitter’s first data partner and provides access to “the full archive of historical tweets,” the company said on its website, adding that it also provides full access to the data available on eight other sites, including Tumblr and Foursquare, and more limited managed access to data on 16 further sites, including Facebook and Google Inc.’s YouTube. The deal is less advantageous for Gnip than it is for Twitter, Grimes said. "I would've thought the logical endpoint would be an IPO, which would raise a lot of money," he said. "It doesn't make sense to me for Gnip unless the price tag is high enough." Terms for the deal were not disclosed. A spokeswoman for Twitter pointed to the blog post on its website as the company's sole statement on the purchase. An email sent to Gnip was not returned. Monetization is not without its perils, Grimes said, adding that Twitter must do its best to avoid alienating its current data partners. “There's a value in having a strong network of partners that can make money off your platform, and Twitter has had that so far,” Grimes said. “There's a trick to finding a balance there to maximizing the revenue that you could make at your own company while at the same time encouraging that ecosystem to thrive, because having this network of partner companies is going to create value for your company in the long run. “ In an interview with tech website TechCrunch, the Datasift CEO Rob Bailey said the deal will not change his company’s relationship with Twitter. “We’ve worked really hard over the years to build a platform that adds value, and we believe that we have been and will remain a vital part of the Twitter ecosystem,” he said. In February 2013, Twitter acquired Bluefin Labs, which analyzed social media commentary about television shows and advertising. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Twitter purchase signals growing importance of data tracking

Broadcast | April 15, 2014

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

CRTC announces changes to Broadband Fund

CRTC launches consult on providing more info to consumers shopping for internet services

Champagne announces launch of Canadian AI Safety Institute

Satellite is ‘here to stay’ as connectivity solution, industry players say

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us