Twitter Sees New Value in Its 'Fire Hose' of Data

Late Friday, Twitter announced that it would no longer license the full stream of half a billion daily messages on its service to third-party resellers. Anyone who wants access to the stream, known as the fire hose, will soon have to license the data from Twitter directly.

On the surface, the announcement affects just the two remaining buyers of Twitterdata, DataSift and NTT, and also suggests that Twitter no longer wants to sell its data wholesale, just retail. But it's also a deeper sign of the company's intention to compete with - and perhaps cut out - many middlemen that profit from helping marketers make sense of the flood of tweets to run their businesses more intelligently.

In a blog post, Twitter said the decision was a natural outgrowth of its purchase of Gnip, the leading reseller of Twitter data, about a year ago.

"Direct relationships help Twitter develop an understanding of customer needs, get direct feedback for the product road map and work more closely with data customers to enable the best possible solutions for the brands that rely on Twitter data to make better decisions," wrote Zach Hofer-Shall, head of the company's ecosystem program.

What he didn't say is that Twitter also thinks direct relationships will make more money. Last year, the company generated $147 million (roughly Rs. 917 crores), or roughly 10 percent of its revenue, from data licensing and other services, and its leaders see data as an area they have only begun to mine.

Chris Moody, the former chief of Gnip and now Twitter's vice president for data strategy, sketched out the data vision at a November meeting with Wall Street analysts. "In the future, every significant business decision will have Twitter data as an input, because why wouldn't you?" he said. "Why wouldn't you add into your business decision-making, 'What does the world think about this topic at this particular time or at a previous moment of time, maybe last year when we ran this campaign,' that type of thing?"

Twitter primarily works with dozens of data analysis and software companies, such as Adobe, Spredfast and Salesforce.com, as a data supplier.

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