) recently announced that it is acquiring Gnip, one of its four
long-time data partners. Investors' sentiments were positively
impacted by the news as the share price surged 11.4% ($4.65) to
close at $45.52 on Apr 15, 2014.
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The acquisition of Gnip is expected to boost Twitter's ability to
better monetize its tweets. Gnip has direct access to Twitter's
historical tweet stream, which it used to resell to customers.
Per Twitter, the tweet data has strong value in the market as it
helps to "
spot trends, analyze sentiments, find breaking news, connect
with customers and much more
These were the primary reasons behind
) acquisition of Topsy Labs in late 2013, another data partner of
Twitter. DataSift and Japan-based NTT Data remain the other two
independent data partners of Twitter.
Gnip also analyzes data from other social media companies
) Tumblr, Foursquare and Disqus. Per
The Wall Street Journal
, it also collects publicly available data from
). However, it is not clear whether these relationships will
continue to last post the acquisition.
Twitter plans to offer 15 new types of advertising products over
the next six months. The acquisition of Gnip's technology will
help Twitter to attract marketers, which will drive revenues.
Moreover, Twitter will be able to directly sell the tweet data to
the existing Gnip customers that will further boost its top-line
growth, going forward.
The Wall Street Journal
, Twitter also hired former
) Map director Daniel Graf as the new product chief. The new
hiring is significant as Twitter aims at making the service user
friendly in order to improve engagement.
Per eMarketer, Twitter's maturing user base is a major concern
for its growth abilities. In such a scenario, user engagement
gains significant importance in order to limit churn rate to
other social sites such as Facebook and LinkedIn.
Twitter's recent new features that are similar to Facebook have
failed to impress users. We believe the new product chief will
primarily focus on making the site as distinctive from Facebook
as possible while launching ad products. This will help Twitter
to counter intensifying competition to attract advertising
dollars, going forward.
Currently, Twitter has a Zacks Rank #2 (Buy).