Twitter is buying social media firehose Gnip, it's largest distributor and among the largest social data aggregators.
On the surface, this could make sense. Twitter has been looking to monetize its data, and simply being a wholesaler doesn't let that business scale. As Rob Passarella notes, the deal is a clear sign that Twitter is focused on its data business.
But the acquisition raises a few interesting questions.
Data aggregation platforms are typically most successful when they are independent. Aggregators thrive because they can be "Switzerland", neutral and unaffiliated with any providers. It's what makes acquisition of aggregators difficult. Once they are acquired, they lose that independence. I've seen this happen many times in the financial data business.
So, the two questions this deal raises in my mind are:
1. What will the other Gnip data partners do, now that Twitter has acquired them? Beyond Twitter, Gnip partners include Facebook, Google+, FourSquare, Tumblr, YouTube, Vimeo, Flickr, Instagram, Disqus, StockTwits, Estimize and more.
While many of these partners may be content to allow their data to flow through Twitter-owned Gnip, I can see some (Facebook/Instagram, Google/YouTube) looking to exit the service.
2. What will this mean for DataSift? Gnip competitor DataSift is the other leading provider of the Twitter firehose, along with Facebook, Tumblr, G+ and many others. Will Twitter still sell its firehose via DataSift? Will Gnip gain strategic advantages due to its new parent? And, will Google or Facebook to jump in with an offer to buy DataSift in response to Twitter's acquisition of Gnip?