Apple shares rose on Tuesday after word got out that the firm had purchased the social analytics firm, Topsy. The smaller company, which analyzes and indexes social data from Twitter, has used its information to judge reaction to political speeches or project how products such as Apple’s may do based on the social buzz after a key launch.
Apple confirmed the acquisition but did not elaborate on its plans for the firm. “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans,” said an Apple spokeswoman late Monday, using the firm’s standard statement for confirming acquisitions. Topsy could not be reached for comment.
The news was first reported by the Wall Street Journal, which cited unnamed “people familiar with the matter” who said the deal was worth more than $200 million. Apple shares rose as high as $563.44, staying near the $560 mark throughout afternoon trading.
Topsy’s access to Twitter’s well of data is not particularly unique, but its ability to parse the messages has made it one of the leading Twitter analysis firms.
In some ways, the deal seems to be an odd one, considering that Apple has largely left the social world to its tech peers. Apart from a poorly received attempt at a music-based social network called Ping, Apple has essentially opted to build social networking into its services through partnerships — including one with Twitter.
But Topsy's value is not necessarily in what it can teach Apple about building a social product, but rather in exactly what it’s already doing — reading sentiment. That sort of technology could give the firm an edge in seeing what complaints social media users have about its own or competitors’ products to inform its own next moves. It could also be useful for recommending products on the iTunes store, based on reader reviews.
Or Apple could use the technology to turn inward as well. The technology Topsy uses to understand how Twitter users feel about an event or product could be used, for example, to improve Siri, as The New York Times suggested in its report. The firm could also use the technology in a more straightforward way — perhaps giving Apple users the option to search Twitter simply by using the product as-is.
Topsy itself has applied for a handful of patents on the ways to parse information from social networks, which may also prove valuable to Apple as it moves into the big data era to make more sense of whatever real-time data it monitors. Owning the technology to do so, rather than simply using it and paying for it benefits Apple in the long-run.
This is the second acquisition that Apple has made in two weeks. Last week, the firm confirmed it had purchased PrimeSense, an Israeli company that makes 3-D imaging sensors.