In what is now the company’s fourth acquisition in the data space, Twitter has purchased Gnip, a company with access to the vast amount of data that Twitter has and resells it to other companies to use. Even though advertising accounts for 90% of Twitter revenue, data licensing revenues have increased by 47% in 2013 to $70 million. This revenue could rise about $100 million by the end of 2014 – not a negligible amount by any account.
As TechCrunch reports: “Gnip offers access to historical Twitter data, and the full Twitter data firehose, but it also offers APIs that provide data from other social networks including Reddit, Instagram, Tumblr, Bitly and more.” Twitter’s other data-generating acquisitions include Crashlytics, Bluefin Labs, MoPub, and five other small companies, all of which were purchased in 2013.
Twitter stock seems to currently be driven almost exclusively by user metrics. Even though user engagement has been down, CEO Dick Costolo has reported strong financial development for the company. How a company could generate more revenue despite users spending less time with the app seems perplex. That is, until one considers the potential that Twitter is more efficiently and effectively using its data that it is engaging and pleasing its users.
It seems that not those who are using Twitter itself, but those who are using its data – for whatever ad or application they see fit – are getting their buck’s worth. Considering the profitable nature of this side of his enterprise, the Gnip purchase indicates the CEO Costolo is continuing on the route of big data acquisitions.
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(Image Credit: Jer Thorp)