Apple has purchased social-analytics firm Topsy for $200 million—but why?
Unlike Apple’s other acquisitions, which seem intended to fill a very specific need—navigational startups to strengthen its mapping software, for example, or firms that specialize in data compression on mobile devices—Topsy’s utility to the tech giant isn’t quite clear at first glance. Topsy boasts access to Twitter’s “firehose,” or all the unfiltered Tweets that flow through the latter’s global network, which allows it to deliver a variety of insights into consumer sentiment and behavior.
The Wall Street Journal first reported the deal, drawing from unnamed sources “familiar with the matter.” Apple later confirmed the acquisition to the newspaper, but refused to disclose any details about its future plans for the property.
Topsy allows its users to measure the social “exposure” from social-marketing campaigns, find influential Twitter users on particular topics, and see how often particular terms are used (and re-Tweeted) on Twitter. Retailers and advertisers can use Topsy’s API as part of a broader analytics package, delving deep into all-important consumer sentiments. The company also has a funky little project that goes under the anime-ready name of Butterfly Robot.
In other words, Topsy would seem like the perfect acquisition target for a Google or Facebook—provided, of course, that Twitter didn’t deny Topsy its “firehose” rights the second such a deal became public knowledge. But Apple doesn’t offer services to marketers; nor does it engage very much in the social-networking game (its previous attempts at the latter, most notably Ping, haven’t exactly taken the world by storm). In fact, its business model doesn’t depend on Twitter at all.
Did Apple purchase Topsy in order to prevent another company (such as its archrival Google) from snatching it up? That seems like a good possibility, especially since Apple, with its billions of dollars in reserve, can well afford to make acquisitions simply to deny a competitor.
There’s also the possibility that Apple has a social-centric project in the works, one that maybe allows users (whether on iTunes or another of its services) to see what’s popular worldwide with regard to music and other media. With its deep Twitter access, Topsy would certainly help with such an effort—but Topsy isn’t structured as a consumer service.
Or maybe Apple wants Topsy in order to better judge what its own customers want. But if that’s the case, shelling out $200 million for the privilege seems a little odd: after all, Apple could simply become a client of the service.
Whatever its motive, one thing is certain: the notoriously tight-lipped Apple isn’t about to share its motivations anytime soon.