Twitter has agreed to acquire Gnip, a social data startup founded in 2008, for an undisclosed amount. The company intends to use the acquisition as a starting point for the expansion of its data business, which offers detailed information to marketers, journalists, and developers.
In addition to helping Twitter augment its existing APIs and create new tools for interested parties, Gnip will continue to serve its existing customers. The company will also offer “more sophisticated data sets and better data enrichments” to make its information more valuable.
The acquisition is one of the few announcements from Twitter that relate to its status as a data and infrastructure company as well as a social network. The company has focused on improving its mobile apps, redesigning its website, and rethinking its service since its IPO — now it’s focusing on improving the data business that those products and services support.
That will probably please developers, many of whom might have been feeling discontented with Twitter since it tried to kill consumer-facing apps in 2012. It will also help the company appeal to those who, as Twitter notes in its announcement, “use aggregated Twitter data to spot trends, analyze sentiment, find breaking news, connect with customers and much more.”
Reactions from around the Web
Wired thinks that Gnip — and Twitter’s data business as a whole — will become more important going forward:
It is true that Twitter has become a powerful tool for social science researchers and journalists, but ultimately this move will help Twitter make its fire hose of data more palatable to Fortune 500 companies. The bottom line down the road is that Twitter needs to continue to find ways to monetize, and data about what we like, what shows we watch, where we are, how old we are, if we have dogs, what time we go to bed, etc. etc. is incredibly valuable to brands who want to target ads to us. They will pay handsomly for it. And now, they will pay Twitter directly.
Quartz supports that thinking even as it notes that the data business represents a shrinking percentage of Twitter’s revenue:
Data licensing may decline as a percentage of Twitter’s total revenue, but in absolute terms it will continue to grow. Twitter’s revenue for full year 2013 came in at $665 million. A little more than a tenth of that revenue—$70 million—came from data licensing. The percentage may not be huge, but in dollars, it’s a big jump over the $47.5 million data licensing brought in in 2012.
The Wall Street Journal offers some background information:
Twitter said Tuesday that it plans to continue making its data available to Gnip’s growing customer base, as well as use Gnip’s staff in efforts to extend its own data platform.
Gnip serves customers in more 40 countries, according to its website. Gnip’s website said the company was the first authorized reseller of Twitter data and the first company to offer access to the complete archive of publicly available tweets. Gnip also provides access to social data sources other than Twitter, including Facebook Inc. and Tumblr Inc.
Mr. Moody said in his blog post that the company joined with Twitter four years ago and has delivered more than 2.3 trillion tweets to customers. The company expects the acquisition by Twitter will enable it to support a broader set of uses.
Fortune suggests that Twitter acquired Gnip because Apple bought another of its data partners, Topsy:
The deal marks a turning point for social data. Twitter only makes its “full firehose” of Tweets available to a few data partners, who filter, package and resell that data to clients. Data reselling has never been a huge business for Twitter, but it is important because this data helps make Twitter valuable to advertisers and brands.
Gnip was one of those partners. Datasift, a social data company with $71.7 million in venture backing, is another. NTT Data, a Japanese company, is the third. And the last one is Topsy, a startup which Apple (AAPL) acquired for more than $200 million in December.
It is understood that Apple’s acquisition of Topsy raised red flags at Twitter HQ. Twitter relies on its ecosystem of data resellers, however small. With one of its few data resellers in the hands of Apple, it made sense for Twitter to bring a big data company in-house. The company needs protect its interests and keep the remaining few data resellers out of the hands of competitors. The other option would be less attractive: If Gnip and Datasift were acquired by competitors, Twitter would have to scramble to build out comparable big data infrastructure itself.