Twitter Buying Gnip to Boost Insight Into Tweets

Twitter Inc. (TWTR) is buying longtime partner Gnip Inc., seeking to offer more insight into trends, breaking news and other data from more than half a billion tweets posted each day.

Gnip, based in Boulder, Colorado, will continue to offer services to existing customers, Twitter said in a blog post today. Terms of the acquisition weren’t disclosed.

The deal gives Twitter a bigger share of profits from reselling analytical data, and also more control over strategic information gleaned from the content flowing through its network. The deal follows Apple Inc. (AAPL)’s purchase of Topsy Labs Inc., which is used by companies to compile consumer sentiment on Twitter, such as responses to television shows or politics. Topsy and Gnip are among the few partners that have real-time access to what’s known as the firehose, the public messages posted by more than 241 million monthly active users.

“These public Tweets can reveal a wide variety of insights -- so much so that academic institutions, journalists, marketers, brands, politicians and developers regularly use aggregated Twitter data to spot trends, analyze sentiment, find breaking news, connect with customers and much more,” Twitter said in the blog post.

Apple paid more than $200 million for Topsy in December, people with knowledge of the deal said at the time.

While roughly 90 percent of Twitter’s $243 million in revenue was from advertising in the latest quarter, the rest came from data licensing to companies such as Topsy and Gnip.

Data Crunching

Twitter may want to build closer relationships with developers using its data, according to Brian Wieser, an analyst at Pivotal Research Group LLC in New York.

“Twitter has wanted to build an ecosystem of partners who use data that originates with Twitter,” Wieser said. “Facebook had been trying to do the same, but none of the companies that originated from that effort have been particularly durable, so maybe Twitter has some ideas about how to do it.”

Gnip, founded in 2008 and led by Chief Executive Officer Chris Moody, was Twitter’s first data partner and also provides information on tweets to the U.S. Library of Congress. The company has provided more than 2.3 trillion tweets to customers in 42 countries for various industries, including marketing, finance, professional services and public relations.

The company also collects data from Facebook Inc., Foursquare Inc., Google Inc.’s YouTube and Yahoo! Inc.’s Tumblr, among others, according to its website. Gnip has raised about $6.6 million from First Round Capital, Foundry Group and SoftTech VC.

“Combining forces with Twitter allows us to go much faster and much deeper,” Gnip said in a statement.

Companies with access to Twitter’s firehose of data are able to sift through the tweets being generated by Twitter’s users, spotting trends and reselling the information to other developers.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

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