Twitter Buys Gnip: What’s Next for the Social Data Ecosystem?

Twitter_logo_blueToday, Twitter announced its intent to purchase social data provider Gnip, one of its certified reseller partners, for an undisclosed sum. It’s not a surprising move in many ways, given the increasing pressure on Twitter to monetize its content. At the same time, the purchase raises important questions about the future of social data: for Twitter, for other social platforms, and for the organizations that use it.

Here is a quick breakdown of how the acquisition could play out; for Twitter and Gnip certainly, but also for competitors, partners and customers.

Twitter

The Good

  • While relatively small at $47M or 10% of revenue, data has become a meaningful revenue source for Twitter.
  • Gives Twitter more control over the ways in which they can monetize their content.
  • More direct ways to sell advertising. From Twitter: “Together we plan to offer more sophisticated data sets and better data enrichments, so that even more developers and businesses big and small around the world can drive innovation using the unique content that is shared on Twitter.”
  • Acquires a number of social data-savvy engineers.
  • Validates the value of social data.

The Bad

  • A lot of work ahead of Twitter and Gnip to provide the level of technology and data enrichment that DataSift currently offers.
  • Potential to alienate Gnip’s other social platform customers and thereby constrict the value of Gnip as a trusted social data source.

The (Potentially) Ugly

  • If Twitter increases cost structure but is unable to deliver on its revenue generation goals.

Gnip

The Good

  • Potentially, the ability to focus on providing deeper level of value with social data, given Twitter’s deeper pockets and vested interest in monetizing its data.
  • Per Gnip blog post: “We’ll be able to support a broader set of use cases across a diverse set of users including brands, universities, agencies, and developers big and small. “

The Bad

  • Loses its neutrality and potentially its ability to engender trust; goes from being “The World’s Largest and Most Trusted Provider of Social Data” to being the world’s largest and most trusted provider of Twitter data.

The (Potentially) Ugly

  • Safe bet many customers’ legal teams will be taking a look at their change of control clauses today.

DataSift

The Good

  • Only freestanding multi-platform player in the market, now that Topsy (which was Twitter-only) is part of Apple and Gnip is owned by Twitter.
  • Strong platform and enrichments; Gnip will have quite a bit of engineering work to do to catch up.
  • Use cases requiring ability to view multiple data sets in context (including mapping social to enterprise data) currently favors DataSift.
  • Validates the value of social data.

The Bad

  • Risk (shared with NTT Data of Japan) of being disenfranchised by Twitter.
  • Other than NTT (important in Japan but relatively unknown in US), last man standing in the “social data reseller” market.
  • Pricing pressure as Twitter/Gnip will be holding the cards on Twitter data; enrichments and value-add will have to be far superior to justify cost.

The (Potentially) Ugly

Customers of Gnip (social technology companies)

The Good

  • Potentially better access and support for Twitter data; better services, more support and a clearer and more secure roadmap.

The Bad

  • Potentially reduced access and support for non-Twitter data.
  • Will be hard to trust services, support and roadmap for non-Twitter data.
  • Need to diversify data streams to mitigate risk; at the same time, if they buy Twitter data from Twitter/Gnip and other social data from DataSift, they are potentially left with inconsistent data sets.

The (Potentially) Ugly

  • Reduces the outlook for a truly open ecosystem of social data, potentially constraining competition and ability to innovate.

Customers of Gnip (Enterprise, agency, systems integrators)

The Good

  • Reduces complexity with regard to sourcing Twitter data; fewer players to deal with, more support and a clearer and more secure roadmap.

The Bad

  • Need to diversify data streams to mitigate risk; at the same time, if they buy Twitter data from Twitter/Gnip and other data from DataSift, they are potentially left with inconsistent data sets
  • No services—at least not yet—that enable users to view Twitter in context of other data.

The (Potentially) Ugly

  • Social data fragmentation could lead to increased complexity, missed opportunity, risk and lack of insight.

Social Platforms (Facebook, Instagram, Tumblr, etc).

The Good

  • Could provide useful insight into monetizing their own social data.

The Bad

  • Hard to justify exposing their data to a competitor.

The (Potentially) Ugly

  • More fragmentation & incoherence, confusing the market, leading to inability to convey strong value proposition and ROI to business.

Where to go from here

Right now, we’re fairly limited in what we can know about Twitter/Gnip’s plans, so a clear set of recommendations by audience would be premature. Nonetheless, I’ve laid out some possible scenarios based on currently available information. As we gain more insight into integration and roadmap plans, I’ll continue to post on this topic. In the meantime, I recommend you do your own scenario planning, knowing that you have incomplete information at this point.

Thoughts? Agreements? Disagreements? Questions? As always, I’d love to hear from you.

[Update 4/16: added “where to go” paragraph; reformatted to paragraphs rather than table.]

About susanetlinger

Industry Analyst at Altimeter Group
This entry was posted in Big Data, DataSift, Gnip, Innovation, NTT, Social Data, Social Graph, Social media, Topsy, Twitter, Uncategorized. Bookmark the permalink.

2 Responses to Twitter Buys Gnip: What’s Next for the Social Data Ecosystem?

  1. DataSift has developed a bad track record of data and reliability issues. There’s still a really painful one with missing Twitter firehose data from early 2012. All too frequent outages too.

    GNIP has always been much more responsive when they have issues with the firehose feed. And considering they raised only a fraction of DataSift’s funding, they’ve built out a really impressive operation.

    There are still the BoardReaders of the world out there for sources beyond Twitter.

  2. I thought the whole point for all three of these companies (Topsy, Gnip and DataSift) were to be “social media agnostic” and provide centralized data distribution services … it seems as if DataSift is now positioned beautifully to command the market because of no direct affiliation.

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