Why Apple Paid $200 Million to Buy Twitter Analytics Startup Topsy

In its $200 million acquisition of social media analytics firm Topsy on December 3rd, Apple may be seeking to prove out the Discover card tagline: It pays to Discover. Topsy, with access to the Twitter fire hose, can search and analyze every single tweet going back to 2006.

But on the surface it isn’t historical tweets that Apple is interested in. Mashable senior tech analyst Christina Warren takes a deep dive into why Apple may have dropped this kind of coin on Topsy, and what it might have in store for the real-time analytics the acquisition brings to the table. While it is all speculation at this point, Warren gravitates towards the notion that the newly-acquired Twitter analytics for real-time sentiment analysis can be used for App store recommendations of music, movies, TV shows, and of course apps. Netflix mines its data in a similar way to make content recommendations to its subscribers, and Apple now has a much larger firehose of data to sift through.

One might look at the price tag and declare Topsy as the big winner here. However, the ultimate victor in this transaction is Twitter. For a company of Apple’s stature to in effect outsource analytics and social insight to Twitter, the value of those 140 characters being tweeted grows exponentially.

It isn’t just Apple looking to Twitter as a bridge to connect consumers to their services. In the Mashable Op-Ed, Warren also cites See lt, a joint initiative between Comcast, NBCUniversal and Twitter that allows Xfinity TV customers to control their TV from a tweet. Comcast views the initiative as a way to more directly connect social behavior to action – in this case tuning into a TV program.

In a Forbes’ post Jeff Bercovici is further intrigued with how Topsy can help Apple enhance its app discovery and recommendation process by moving beyond ratings and downloads to true sentiment analysis. He also postulates how Topsy can help Apple match its broader vision for Siri voice recognition to the current reality.

Much of the speculation around what Apple will do with Topsy focuses on real-time analysis. This may be overlooking a key asset of Topsy, which is that it allows users to conduct highly filtered searches and analyze tweets going back to 2006.

What is the value of historical sentiment and trend analysis? Broadcast studios could go back and analyze viewer sentiment on the introduction of certain types of characters to a TV drama, and use that information to decide which characters to develop for future programs. Networks with sports programming can view seasonal trends on when particular markets shift attention from, say watching NFL to NBA in order to make current and future programming decisions.

Historical tweet analysis is not limited to text. What type of content are consumers compelled to photograph, or take videos of, and how can these trends be used for future engagement?

It is unclear how quickly we will see or hear more about Topsy-enabled capabilities in action at Apple, but it is clear that this announcement – and initiatives such as Comcast See It – indicates Twitter is emerging as a core engine for content producers to analyze consumer sentiment, and engage with individuals based on this information.    

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