FORTUNE -- Yesterday morning, Twitter (TWTR) announced it had acquired Gnip, a company which packages, filters, and sells data from social media streams. The deal raised questions about the hot category of "big data" for social media, particularly for a startup called Datasift, which has raised $71.7 million million in funding from a long list of prominent venture capital firms.
Aside from a Japanese company called NTT Data, Datasift is the sole independent reseller of Twitter's "full firehose" of data. The others have been acquired -- Topsy by Apple (AAPL) in December, and now Gnip by Twitter itself.
Now that Twitter owns Gnip, it has no motivation to continue licensing its data to Datasift, a Gnip competitor. The companies have said their relationship with Datasift won't change, but there's precedent for change: Twitter is likely to wind down its relationship with Topsy, now that Topsy is owned by Apple, after its contract expires.
In recent years, the big social media platforms such as Facebook, Twitter, LinkedIn, Pinterest, and even Foursquare have discovered there's great value in the data they produce. Knowing that, some are less likely to share that valuable data with third parties, which have, up until now, made a lot of money selling that data.
Shortly after the Gnip deal was announced, Datasift posted a statement on its blog, congratulating its competitor and calling the deal a milestone for the category. A conversation between Fortune and CEO Rob Bailey and CTO and Founder Nick Halstead later in the day revealed the company has been transitioning itself away from the "social" part of its "big data" mission for some time. An edited transcript appears below.
Do you really foresee no changes to your business in light of this deal?
Bailey: There's always going to be changes to the business. Our business has evolved tremendously over the last few years. We started out as a simple Twitter syndicator and have worked our asses off to get to this point where we are now ... We've been around seven years. Our business has always being based on business processing and licensing. The reason we've aggressively raised money is because our investors believe in a much bigger market of unstructured data processing, and the ability to join a whole range of data sets together.
What percentage of your business relies on Twitter vs. other social networks or sources of data?
Bailey: If you'd asked us three years ago, it would have been the majority. Now it makes up a small percentage. Do customers only buy us for access to Twitter licenses? Absolutely not. It's a relatively small part of our business. Years ago, our main value proposition was, "We've got Twitter data." But being the paranoid guys that we are, we realized an amazing value proposition one day is completely outdated later.
[The company would not specify how small the percentage is.]
If all the social networks pulled their data, would you still have a business?
Bailey: We wouldn't suffer at all, because we still have independent sources of data from our clients. If you are a big customer like Dell and want a single view of many sources of data, you don't want to have to integrate with 10 different APIs. We give a single view of the data through a single API, and we have spent years doing the data integration work. No one network can develop all of that functionality independently. If someone like Goldman Sachs wants access to 20 networks, they're not going to hire 50 engineers to work on those APIs. They pay for us to be the layer that sits on top of those APIs.
Halstead: Gnip's model was focused on licensing. We are very focused on being an engine for doing data processing. We like to do the licensing because there are a lot of advantages for the social networks to have us work on behalf of them.
We are still the Amazon of real-time data processing. We don't mind if the licensing comes in independent of us as long as they pipe it through our platform. The key is we are an integration platform and a processing platform.
It sounds like you're moving away from the focus on social data. Is that fair to say?
Bailey: The social data market is evolving. We've already expanded into news and private social networks and community forums. What we're finding is companies want to work with one category integration platform across lots of different data sources.
What did you think when Apple bought your competitor Topsy?
Halstead: It blew our minds for thinking bigger about the potential for the platform we developed. If Apple purchased this company, to not even use this company for what it was intended, maybe we should look at our platform that way. It triggered a lot of creative thinking for us about what the possibilities were beyond social.
Bailey: Our venture capitalists would not have given us $70 million just to focus on the social data market. That would not make any sense. We have increasingly found out over the last year, especially with our partnership with [business analytics software company] Tableau (DATA), that when companies are making decisions, they don't say, "Let me go check social." They check the market, and social is a component of their decision.
Are you looking to sell now?
Bailey: On the contrary, actually. We want to be a big publicly traded company someday. When we think about the companies we look to for inspiration, in early days we looked to Gnip, but now we look at Informatica (INFA), Splunk, (SPLK), and tableau. We want to be a big public company.
What's the time table on that?
Bailey: We could be there in two to three years.
How many customers do you have?
Bailey: Over 1,000.
How much do they pay?
Bailey: It ranges from $5,000 per month to over $50,000 per month.
And what's your revenue?
Bailey: That information is not public, but it's in the tens of millions.
Do you expect to be cut off from Twitter's firehose?
Halstead: Twitter has made it very clear it won't be cutting us off. We have a good relationship with Twitter. I'm the inventor of the retweet button -- we've been working with Ev and Jack and Twitter since back when they were just 20 people. We put together a long-term contract and nothing is changing that.
Deal follows Apple's acquisition of Topsy, one of just four Twitter data resellers.
FORTUNE – This morning Twitter (TWTR) acquired Gnip, a social data company, for an undisclosed amount. The deal will likely mint Gnip's early investors a healthy return, as the Boulder-based startup had only raised $6.64 million in venture backing with 85 employees. Back-of-the-envelope estimates say the company had been running on its own profits for some time.
The deal marks a MOREErin Griffith - Apr 15, 2014 11:11 AM ET
How MLB aims to maintain its lead in the crowded sports-analytics field.
By Daniel Roberts, writer-reporter
FORTUNE -- Stats junkies, rejoice: The sport that brought you the Moneyball craze and outfitted all its stadiums with a sophisticated service to track and digitally record live pitches is now deploying even more technology aimed at collecting and analyzing players' every move.
MLB Advanced Media, the tech outfit owned by baseball's 30 clubs, is rolling out MOREDaniel Roberts - Apr 10, 2014 6:46 AM ET
It's never been more important to keep services and applications online, which is why CEO Gary Read says his company can be bigger than ServiceNow.
FORTUNE -- Boundary, a company that monitors the performance of companies' technical infrastructures to ensure that their applications and services stay online, announced this morning that it raised $22 million in a Series C funding round.
The round was led by new investor Adams Street Partners MOREAndrew Nusca - Apr 3, 2014 7:51 AM ET
Want to work at Tableau Software? You might have to get an Academy Award first.
FORTUNE -- Most big data companies don't recruit Hollywood types, and most weren't co-founded by executives with three Academy Awards under their belt.
Tableau Software (DATA), a Seattle-based provider of data visualization tools, is a little bit different. Founded by Pat Hanrahan, an early employee at Pixar Animation Studios, along with co-founders Christian Chabot and Chris Stolte, the company claims its MOREMichal Lev-Ram, writer - Mar 28, 2014 12:11 PM ET
Forget microfinance. The startup Lenddo is using social data to determine credit scores for a new group of lendees.
FORTUNE -- A big challenge for people in an emerging middle class who are struggling to find avenues to credit is that they rarely have formal credit histories.
They do, however, have social networks -- rich communities of family members and friends who can vouch for their character and credibility. And increasingly, as MOREJessi Hempel, writer - Mar 18, 2014 3:10 PM ET
Can marketers pluck the right data from "big data"? They're certainly trying.
By Courtney Subramanian
FORTUNE --Big data this, big data that. The popular Silicon Valley buzzword has become so ubiquitous -- the term was even added to the Oxford English Dictionary last year -- that it seems to mean everything and nothing at the same time.
Big data will transform industries! Change the way we work and live! Alter the future MOREMar 17, 2014 5:00 AM ET
Gnip's ability to sift through big data is a big business, even if everyone working in the field hates the term.
FORTUNE -- A spate of acquisitions of big data startups has drawn attention to an already hot category. In December, Apple (AAPL) bought Topsy, a social data analytics company, for $200 million. Last week Google (GOOG) outbid Facebook (FB) for DeepMind Technologies, an artificial intelligence and big data company, paying $400 million, MOREErin Griffith - Feb 7, 2014 11:41 AM ET
After IBM again misses most expectations for its quarterly earnings, its chief executive makes a concession of her own: her compensation.
FORTUNE -- IBM (IBM) chief executive Virginia "Ginni" Rometty is passing up her annual bonus.
It's a rare move for any tech CEO, and it signals that Rometty knows she's got trouble on her hands. She made the announcement Tuesday as the company missed Wall Street's expectations yet again for its MOREJessi Hempel, writer - Jan 21, 2014 4:39 PM ET
The financial planning site is growing fast, and has a lot of data to show for it. A newly hired data whiz from Netflix will take on the challenge.
By Daniel Roberts, writer-reporter
FORTUNE -- You may not have heard of LearnVest yet, but your financial planner likely has.
The startup that Alexa von Tobel launched in 2009, initially as a budget-help website directed at women, has pivoted slightly in its time. MOREDaniel Roberts - Dec 17, 2013 3:05 PM ET
|Delinquent IRS employees paid bonuses by the agency|
|Court quizzes Aereo: Do TV streams break the law?|
|How women can narrow the 'confidence gap'|
|Gun silencer sales are booming|
|Move over Facebook, Alibaba's mega IPO is coming|