Apple Spends Over $200 million to Acquire Topsy

According to The Wall Street Journal, Apple recently purchased Topsy, which is a social analytics firm that focuses on gathering and analyzing data from Twitter. The deal was reported to be worth over $200 million. Topsy allows users to access well over 425 billion tweets that have been stored since 2006. This access allows customers to look for and examine trends as they are presented through Twitter. Although Topsy does have a couple direct competitors, their system has been deemed superior. This is in part because of Topsy’s user-facing tools, which among other things allows users to search by topic and trend.

What is not yet clear about this deal is why Apple made it. There is no immediately clear benefit for Apple. However, there are several possible theories, which would explain Apple’s interest in the company.

The first of these theories is that this deal was actually an acqui-hire. That is, Apple was more interested in acquiring Topsy technology and engineers than their current services. Apple may want to use these new resources to incorporate into or improve other Apple products.

For example, Apple has already shown interest in improving the relevancy engine for searching in App and iTunes Stores. Including social signals to the current search algorithms of these stores would greatly improve the relevancy of search results. Tracking app trends across the social media platforms would enable Apple to improve their categories and collections to increase interest in end-users.

Apple could also utilize the information gleaned from personal Twitter feeds to recommend apps specific to a user, opposed to generally to all users. Making personalized recommendations like this would be a first for Apple.

The Wall Street Journal suggests Apple may use the Topsy engine to improve the relevance of their advertising through iTunes Radio and iAd platforms. This would increase overall relevance, as well as their revenue from advertising, which has not been impressive thus far.

It has also been suggested that Apple will use Topsy to improve their Siri search. Topsy’s stored data trends and firehose access would give Siri a reliable way to provide users with trending topics and relevant search results. Another suggestion has been that Apple is actually interested in the more than a dozen patents Topsy has filed for systems and methods associated with social networks.

This isn’t the first time Apple has purchased a company for the purpose of using their resources to improve other Apple products.

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