Apple recently purchased the social media tracking company Topsy Labs for around US$200 million, which gives the iPhone and iPad maker a database of Twitter posts dating back to the social networking site's launch in 2006. On first glance, the purchase could be seen as another attempt on Apple's part to get deeper into the social networking game, but this buy may be more about selling ads.
Topsy Labs collects everything that posted to Twitter, which now amounts to about 500 million tweets each day, and then analyzes the content for its clients. The information Topsy can glean from the Twitter posts it sifts through shows hot topics, growing trends, big news, and more. In the hands of advertisers, that data can make an invaluable resource for targeting potential customers and determining how best to get their attention.
That information could be used to launch a new social networking service -- maybe even a new Ping -- but that's not likely the path Apple wants to follow. Ping was Apple's atempt to join in on the social networking game, but with a musical twist. The service linked to user's iTunes Store accounts to show purchases and let friends add their own comments. The idea was to create a music discovery system through social sharing, but ultimately failed because iTunes customers didn't find Ping compelling.
After stumbling with its own social networking service, Ping, Apple cut its losses and formed better relationships with Facebook and Twitter, and it's likely that's the path the company will continue to follow for at least the near future. If so, that means the Topsy purchase isn't about getting a foot back into the online social game.
Instead, the purchase may be more about enhancing iAds, Apple's in-app advertising service, and offering up better recommendations to iTunes and iTunes Radio users. Improving iAds could bring in more advertising dollars for Apple, and a better music and video recommendation system could be a valuable tool in the battle for the top position in the online streaming music market where Pandora and Spotify are currently the big names.
According to the analytics company, it can accurately identify which country well over 90 percent of posted Tweets come from, and exactly which city for about a quarter of all Tweets. Information like that could be used to determine which ads are best suited for a region, and what music and TV shows are most popular for a specific area -- all of which helps drive sales.
Apple isn't going any farther than to say it did purchase Topsy Labs, but it isn't much of a stretch to see the company being used to bolster Apple's existing services instead of signaling the beginning on a new social networking service. For Apple, it's about adding value to what it already offers, not making the next Ping.
[Thanks to the Wall Street Journal for the heads up]