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Summary:

So it’s confirmed: Twitter is buying Summize. As I’ve said previously, I think this is a super-smart move by Twitter, and if the company plays its cards right, one that will pay dividends in the long run. Here are some additional financial details of the deal. Continue Reading

Twitter has confirmed that it is buying Summize and rolling it into the San Francisco-based company’s main offering. After the rumors of the deal were reported by Josh Chandler last week, I was able to confirm that the deal was done and would be announced on time. So right on time, the two companies made a joint announcement.

As indicated in the post, I promised to get some more financial details on the acquisition. Peter Kafka pegs the price at $15 million in stock and cash, though I am much more confident on the information from my sources, who say Twitter gave away north of 10 percent of the company to acquire Summize. My sources peg Twitter’s value at around $80 million. If you remember, I had reported about $15 million in new funding earlier this summer. As part of the deal, Summize employees are going to join Twitter, though CEO Jay Virdy is going to leave and do something else.

We’re excited to announce that Twitter has acquired Summize—an extraordinary search tool and an amazing group of engineers. All five Summize engineers will move to San Francisco, CA and take jobs at Twitter, Inc. This is an important step forward in the evolution of Twitter as a service and as a company.

As I outlined in my posts last Monday and yesterday, I think it is a super-smart move by Twitter, and if the company plays its cards right, it’s going to pay dividends in the long run. What they have given away is chump change compared to the potential. As I wrote last week:

The deal would be a good move by Twitter, and would be putting some of its recently acquired $15 million in VC funding to decent use as it would help the company get hold of of a business model.

Summize has come up with a clever way of peering through Twitter’s vast data stream and finding out what’s hot, where and how. The results are essentially keywords — topic-, person- or location-based — and thus can be used to show contextual advertising next to the pages that show these results. Summize has thereby developed an ability to monetize conversations without being intrusive.

Unlike a lot of others, I am not ready to throw my lot with some of the newer services just yet. One of the things that continues to attract me to Twitter, warts and all, is the relatively simplicity of it core service. I fell in love with it long before it became a Silicon Valley diva with a bad drinking problem. Of course, we all know recovering divas can slip into bad habits again. That is one thing I worry about: ability of Twitter to actually harness and not mess up this new acquisition.

Update: Michael Arrington interviews Ev Williams, one of the founders of Twitter about the company’s plans in an extensive interview.

  1. Wow, so Twitter is gonna get a lot better.

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  2. I think the only question on everybody’s tongue right now is: will that help the fail whale go away?

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  3. This makes much sense, because Summize offers great Sentiment Analysis technology.

    With Summize Twitter is now a gold mine for Web Data Mining and Web Monitoring. Ford could ask Twitter, how their products do. If the people like their new car or not. Ford could pay Twitter to monitor all their products and get alarmed, if the twitter crowds talks bad about a particular auto.

    Twitter + Summize is like ICQ + Nielsen//NetRatings on steroids

    I will make a deeper comment on the relationship between Twitter and Summize, here, later
    http://konterkariert.tumblr.com/post/42355329/twitter-starts-web-data-mining-with-summize

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  4. I suppose “monitoring the stream” services could be a way to monetize, but aren’t they essentially giving that service away now?

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  5. Good luck twitter. Twitter is ond of best services around. Crisp and minimal. I hope they gonna become stable and robust. And guys forget wt others are saying about you. Keep tweeting.

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  6. @PhoneBoy… Well that is precisely the point here. Hopefully they will monetize it well.

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  7. [...] a shot in the arm that Twitter needed badly. Twitter knows this as well as anyone; according to Om, it’s a shot that they might given away 10% of the company to get. There’s no shortage of pretenders to Twitter’s throne (Plurk, FriendFeed) but Twitter [...]

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  8. [...] irgendwie, besser gesagt kurios: Summize.com wurde von Twitter übernommen. GigaOM meint, dass Twitter dafür 10% seiner Geschäftsanteile dafür hergegeben habe, andere [...]

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  9. [...] Über den Deal sind einige Eckdaten bekannt geworden. So meinen einige Twitter hat dafür 10% seiner Geschäftsanteile übertragen, andere wissen das Twitter eine Summe von 15 Mio. USD in Geld und Anteilen berappt [...]

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  10. [...] irgendwie, besser gesagt kurios: Summize.com wurde von Twitter übernommen. GigaOM meint, dass Twitter dafür 10% seiner Geschäftsanteile dafür hergegeben habe, andere [...]

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