(Reuters) - Twitter Inc said on Tuesday it bought social data provider Gnip for an undisclosed amount, signaling that it would take on a new role of packaging and selling data, a service in demand by business and government.
The social media company said separately that it hired a Google executive to lead its consumer product development, filling a position that had been vacant since January.
Investors reacted positively to the news, sending Twitter shares up more than 11 percent, the biggest gain since the day it went public in November.
Twitter said in a blog post that the Gnip deal allowed it to burrow more deeply into the 500 million tweets sent daily on its network. The company previously allowed third-party firms such as Gnip, Datasift and Dataminr to buy access to the tweets and then re-sell that data to corporate clients.
“Public tweets can reveal a wide variety of insights — so much so that academic institutions, journalists, marketers, brands, politicians and developers regularly use aggregated Twitter data to spot trends, analyze sentiment, find breaking news, connect with customers and much more,” Twitter Vice President Jana Messerschmidt said.
Twitter’s success in creating a user base of 250 million has spawned a vibrant industry of independent analytics outfits that are now able to tip off traders about stock news, or inform television producers about viewer sentiment, or alert government agencies to disasters in remote locations.
Ryan Sarver, a former director of platform at Twitter and now partner at Redpoint Ventures, said the tie-up could immediately boost Twitter’s revenue, since hundreds of clients in finance, media and government are willing to pay for insights from Twitter data.
“You essentially have this corpus of global consciousness and at any moment you can tap into that,” Sarver said. “There’s massive latent value in that tweet stream.”
It remains unknown how the Gnip deal will affect Twitter’s relationship with other Twitter data providers.
Gnip, Founded in 2008, has a four-year-old partnership with Twitter but also provides data for social media content on Tumblr, WordPress, Reddit, Instagram, and Foursquare.
Twitter said separately Tuesday that it had hired Daniel Graf, a Google executive managing the Google Maps app, to head Twitter’s consumer product team. Graf replaces Michael Sippey, who left in January.
Twitter has been in the midst of a months-long effort to refresh its core website and mobile apps, which have failed to bring in large numbers of new users. Twitter said in February that its user base grew by 4 percent, the lowest rate in years, while timeline views also dropped dramatically.
The company has unveiled a number of cosmetic tweaks in recent weeks in hopes of improving user growth. Earlier this month, for instance, Twitter redesigned its user profile page to resemble a more popular social media site: Facebook.
Reporting by Gerry Shih in San Francisco and Supantha Mukherjee in Bangalore; Editing by Kirti Pandey