DataSift/Twitter Partnership Opens up Historical Data to Companies

Twitter partner DataSift announced an extension of its relationship with the social network this week which will allow DataSift to provide insights on Twitter data dating back to January 2010 through a new product called Historics. Previously, 30 days has been the longest anyone selling historical Twitter data has had authorized access to from the company. The deal means that DataSift will be able to offer its clients extensive looks into large archives of Twitter data, with fine-tuned options that provide a highly granular level of control.

DataSift CTO and founder Nick Halstead demoed a possible use case of this data during an interview. He showed how a company could use the information provided by DataSift to correlate data around expressed sentiment on Twitter with stock prices over time, using RIM’s recent announcement of new CEO Thorsten Heins. DataSift Historics revealed that after an initial drop in stock price, RIM’s share value actually rose, but only after sentiment on Twitter become more positive as the Monday morning following the announcement wore on.

That’s only one example, however, and Halstead noted that the data can be used in many ways not only across companies, but also within a single licensing entity. “What’s interesting is the number of use cases within an organization,” Halstead said. “[DataSift] can percolate throughout the company in terms of where it’s useful.”

What DataSift gains in terms of being able to offer its clients a much more robust, in-depth look at one key area of their overall social media analytics picture is huge, but what Twitter stands to gain is arguably bigger. It’s widely known that Twitter is still trying to find its footing in terms of discovering a workable revenue model to monetize its product; the DataSift arrangement becomes another revenue stream, alongside initiatives like Promoted Tweets, which will soon be proliferating through Twitter’s mobile apps in addition to appearing on the web.

DataSift pays Twitter a standard licensing fee for use of its tweets, but there’s also a revenue sharing agreement separate from that arrangement specific to use of historical data. Halstead couldn’t discuss the specifics of that deal, but it’s definitely one way Twitter can leverage its reach to increase money coming in. Other publications have even suggested that DataSift is a potential acquisition target for Twitter, but Halstead firmly denied the idea, noting that DataSift partners with multiple input sources besides Twitter and has much bigger plans.

The sale of historic Twitter data to a company that partners with marketers, among others, has raised eyebrows among Twitter’s user community, however. The move is being flagged by some as a possible concern for privacy advocates. So far, most privacy scrutiny has landed with Facebook and Google, but Twitter could indeed be opening a can of worms with the sale of its users’ data, as sentiment in tweets like this one from tech evangelist Matt Gemmell indicates.

It wouldn’t be the first time Twitter’s attempts to monetize have run afoul of users. The company introduced a feature called the Quick Bar in early March 2011 to its iPhone application to surface trends, including promoted trends, at the top of a user’s stream. It was greeted almost universally with negative reaction from Twitter’s user community, and was subsequently removed in another update later that month.

It remains to be seen whether or not the DataSift arrangement will evoke the same kind of reaction, but unlike the Quick Bar, it isn’t being thrown in the face of everyday users. The likely outcome will be that DataSift will be able to continue to offer unique insights to brands and enterprise customers sourced from a deepening well of archived tweets, and Twitter will add another revenue stream to the books with potential to grow if it makes similar arrangements with DataSift’s competitors.

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