Twitter Acquires Firehose Provider Gnip

Although an emerging technology several years ago, sentiment analysis is now widely used to pipe in social media data for crunching in analytics engines by financial services firms. Several studies have indicated that large-scale stock market price moves can be accurately predicted by analyzing social media data, and major vendors now include social sentiment in their platforms as standard. One hedge fund, Derwent Capital Markets, attempted to trade purely on its proprietary sentiment analysis technology, but folded due to market conditions and was eventually reborn as investment firm Cayman Atlantic.

Twitter's acquisition of Gnip is being seen as a defensive one, following Apple's acquisition of Topsy late last year, another company with the privileged capability to take in the stream of data produced second-by-second on Twitter. Outside of the two firms, only two others remain with firehose access ─ Datasift and NTT Data.

Financial terms of the deal were not disclosed.