December 3, 2013
A Tweet Deal: Apple Buys Twitter Analytics Startup Topsy For $200MM
Apple has announced its purchase of Topsy, a social media analytics firm, for more than $200 million. Topsy specializes in analyzing global conversations that take place in the Twittersphere.
In fact, Topsy is in the VIP section – it’s one of just a handful of companies that have full access to Twitter’s full data stream, often referred to as its 'fire hose,' which consists of every single tweet dating back to 2006. Of course, back in 2006 the number of tweets was merely a trickle. Today, however, the number averages around 500 million tweets each day.
Vipul Ved Prakash, a former Napster Inc. engineer and the brains behind the anti-spam software company Cloudmark, founded Topsy in 2007.
According to their website, Topsy is “a real-time search engine powered by the Social Web. Unlike traditional web search engines, Topsy indexes and ranks search results based upon the most influential conversations millions of people are having every day about each specific term, topic, page or domain queried.”
Topsy is able to take the aggregate tweets and find meaningful insights and data which it then provides to its customers. These insights include not only what topics people are talking about on Twitter, but also who key influencers are on those topics, exact counts for any term instantly and other precise metrics.
This information is proving increasingly crucial for companies who want to better target specific consumers. Topsy’s analytics can help companies model current trends against current competitors or past events. They can obtain real-time information to see what people are talking about, or they can compare their visibility to that of their competitors.
Apple is a giant in the technology sector, but it has been cautious in its forays into the social media realm; especially after its music sharing service Ping failed to capture consumers’ imagination and was quickly retired.
So what exactly does Apple plan on doing with Topsy? Not surprisingly, Apple is remaining tight-lipped, with spokesperson Kristin Huguet offering nothing more than the boilerplate comment: “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”
Though they are playing it close to the vest, you can bet that this is a strategic acquisition and Apple has something in mind for it, even if it might not be immediately apparent to tech industry pundits.
Apple could use Topsy’s analytics to learn more about what is trending online, which would allow them to offer more targeted opportunities for better placement of their products across social media.
"Brands across the world are looking at ways to use the time spent by customers on social media to enhance their brands, and Apple is no different," explains Manoj Menon, Managing Director at consulting firm Frost & Sullivan.
“There are millions of people sharing their thoughts on platforms such as Twitter on any given day. For companies to be able to understand what is popular with these users and what they are interested in, and then use it to their advantage, they need to filter the content and understand it. Topsy gives Apple the tools to do just that," says Sanjana Chappalli, Asia-Pac head of LEWIS Pulse, a firm specializing in digital marketing services.
By integrating analytical capabilities like Topsy’s into its products and services, Apple could improve the overall user experience, too.
Apple’s web browser, Safari could certainly put such analytics to good use. So could its Siri voice assistant, using Topsy’s information to deliver more specific and personalized search results. The iTunes media store could recommend songs, movies and TV shows to users based on their interests and that of their Twitter friends.
Even Apple partners stand to benefit. Media companies providing content to iTunes, developers who create apps for the App Store and online advertisers could all cash in on the very specific data analytics.
It still remains to be seen whether or not Twitter will continue to give Topsy such golden ticket access to its data stream now that it is under Apple’s ownership umbrella.
However, given that Apple led the charge of early adopters by integrating Twitter with the iPhone, it seems highly unlikely that either Apple or Topsy would have closed the deal without Twitter’s blessing.
This acquisition is consistent with Apple’s practice of purchasing smaller tech companies who are best in class or who have innovations that can be integrated into their products. Apple’s recent acquisitions also include AuthenTec and PrimeSense.
At this rate, another acquisition could happen at any time, so we’ll be watching to see who gets snapped up next to be another arrow in Apple’s growing quiver.