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The Twitter Inc. logo is displayed on the company's preliminary prospectus arranged for a photograph in Washington, D.C., U.S., on Monday, Oct. 28, 2013. Twitter Inc., which embarks on its road show to investors today, will make the case to potential investors in its initial public offering that it needs to keep spending to grow, and profit will come once it can reap the benefits of those investments. Photographer: Andrew Harrer/Bloomberg via Getty Images
Twitter announced it's acquiring Gnip, a social data company that packages and resells its tweets, for an undisclosed amount of money.
"As Twitter has grown into a platform that delivers more than 500 million Tweets per day, Gnip has played a crucial role in collecting and digesting our public data and delivering the most essential Tweets to partners," wrote Jana Messerschmidt, vice president of global business development and platform on the company blog.
The truth is that Twitter hasn't been very good at managing and packaging its own data, especially its catalog of tweets called the "full firehose.". It has relied on several companies
: Datasift, NTT Data, Gnip and Topsy to package and resell them to clients, according to Forbes.
Topsy was bought by Apple for $200 million last year. Datasift had $71.7 in backing, so it was likely expensive, but Gnip with only about $6.64 million in backing was likely a steal.
Previously, Twitter didn't care about reselling data because it wasn't a big revenue stream, so it was happy to let others do it. Now, however, Twitter realizes that the data is important and being able to package and resell your own data might be valuable.
Unfortunately, Twitter didn't realize this until Apple bought Topsy and a large competitor controlled its own information. That's likely when Twitter began looking for a similar, but cheaper, company to buy.
This buy and Apple's Topsy acquisition could also signal a new data revolution. Gnip also packages and resells information from Tumblr, WordPress, YouTube, Facebook and others, but the companies that own them may also not like a competitor owning part of their business either (that includes Yahoo and Google).