Why Twitter Inc Swallowed Gnip

Twitter's data licensing business is relatively small now, but the company's acquisition of data partner Gnip could hint that it wants to grow this business even further.

Evan Niu
Evan Niu, CFA and Erin Kennedy
Apr 16, 2014 at 2:30PM
Technology and Telecom

While many eyes following acquisitions in the social networking space are looking to Facebook (NASDAQ:FB) and its recent flashy, high-flying purchases of WhatsApp and Oculus VR, Twitter (NYSE:TWTR) has also been on somewhat of a buying spree, and has made a couple buys recently that investors should know about. In this segment from Tuesday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu take investors through Twitter's two recent buys.

The first purchase the company announced this past week is an Android app called Cover. The app allows Android users to customize their lock screens to give them access to the apps and options they use most at different times and locations throughout their day. Evan looks at this as a home screen play similar to Facebook's Home initiative, which was a definite flop, but was aimed at driving up user engagement. Evan gives his thoughts on whether Twitter could have more success with the strategy than Facebook did.

The second acquisition was a social data analytics provider called Gnip. The company was Twitter's first data partner, paying for access to the enormous amount of raw data coming through Twitter in the form of tweets every day and repackaging it for clients into meaningful metrics. While this data licensing business isn't huge in terms of Twitter's overall revenue, bringing this data licensing business in-house and moving to make this data more accessible to a wider audience could mean a lot of growth for Twitter in this segment in the future.