Twitter is buying its longtime data partner, Gnip, for an undisclosed amount of cash, potentially to maximize profits from users’ data by selling it to advertisers.
The social media company hopes the deal will make tweeted information about your daily routine, such as your favorite coffee shop, or whether or not you have a dog, more accessible to marketers and advertisers. “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,” the company wrote Tuesday in a blog post announcing the purchase.
Colorado-based Gnip is the world’s largest social data provider, collecting information from sites — Tumblr, Foursquare, Facebook and Instagram to name a few — that’s then analyzed and sold to news organizations and universities for research, and, most importantly, ad agencies and businesses. Before the deal, Twitter didn’t own any of its data centers and Gnip was just one of many Twitter’s data partners certified to handle its massive load of raw data, called Firehose.
But thanks to the new deal, the startup will be able boost Twitter’s data-mining capabilities by plugging into the site’s back end. Buying Gnip not only makes Twitter more appealing to investors, but allows the social media giant to more tightly control how tweets are analyzed and doled out to advertisers. Gnip’s access to Twitter’s infrastructure allows it to spit out Facebook-like customized data based on user behavior, which could, in turn, lead to more privacy concerns.
Twitter has largely avoided privacy violations, and more often than not, has fought to protect users’ privacy. For example, the company has often resisted handing over its data to law enforcement and even threatening to sue the National Security Agency for not letting it publish exactly how many requests it has received. The Electronic Frontier Foundation praised Twitter for protecting its users privacy from surveillance last year in its annual “Who Has Your Back?” report. But since preparing to take the company public, Twitter has inched closer to Facebook in terms of testing the privacy limits of mining its customers’ data for ad dollars firsthand.
“It is certainly true that once a company starts monetizing its data, privacy problems often emerge,” David Jacobs, the consumer protection counsel for the Electronic Privacy Information Center (EPIC) told Mother Jones. “If Twitter goes down that road, which it probably will, it will have to deal with the same privacy issues that Facebook and Google have dealt with.”
Facebook, Twitter’s biggest competitor, is known for pushing the privacy line with its users by monitoring their cursor movements, status updates they don’t publish to their feed and using personal photos for ads without permission. But Facebook’s data-mining has paid off, so much so that about half of the company’s revenue comes from ads — ads that are tailored to users’ interests and online behavior.
Twitter has struggled to gain new users and entice investors since the company went public in 2013. With such stagnant usership — nearly half of which is inactive — Twitter has been making several changes, including a complete site redesign that’s strikingly similar to Facebook.
The move could potentially make the micro-blogging site more profitable. Facebook’s revenue and value skyrocketed once it honed its data-mining last year. Twitter only takes in about $220 million in ad revenue each year, which is about a tenth of Facebook’s $2.34 billion ad income.