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 Snip 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
David Byttow, co-founder of the anonymous social app Secret, discusses his company's talks with Facebook.
FORTUNE -- Earlier this week, it came to light that Facebook was having talks with Secret, a mobile application that lets people share messages anonymously with the contacts on their phone. Rumors quickly surfaced that Facebook (FB) was evaluating whether to acquire the small company, which despite the buzz only officially launched on Jan. 30. Facebook denied the rumors, and MOREJessi Hempel, writer - Apr 10, 2014 5:00 AM ET
People are spending more time on their mobile phones versus their desktops, but the mobile web still has its place for companies to market themselves.
By Zachary Rosen
FORTUNE -- Not long ago pundits were declaring the death of email due to the rise of Social Networks. They were wrong.
Earlier this week, Chris Dixon, one of my favorite writers and investors, wrote a piece on what he sees as the inevitable MOREApr 9, 2014 12:46 PM ET
Android or iOS? That may depend -- more than you know -- on where you live.
FORTUNE -- Do the rich tweet from iPhones and the poor from Androids?
That was Business Insider's takeaway from a graphic of Twitter usage that painted Manhattan island Apple (AAPL) red and Newark, N.J., Google (GOOG) Android green.
Patently Apple's Jack Purcher didn't buy it. And with series of maps like the one above, he made the case Friday that when MOREPhilip Elmer-DeWitt - Apr 5, 2014 2:55 AM ET
Five years ago, Facebook trailed MySpace, Twitter was busy harpooning its Fail Whale, and LinkedIn was valued at $1 billion and turning a profit. Where will they be five years from now?
By John Patrick Pullen
FORTUNE -- Imagine a future where you'll be able to physically reach out to poke your Facebook friends (gross), where tweets are the de facto mode of communication for large-scale emergencies (cool), and where people log into Google MOREApr 2, 2014 5:00 AM ET
China's Twitter faces real challenges heading into its IPO.
By Scott Cendrowski
FORTUNE -- It's impossible to know whether a company's stock will rise or crash after an IPO. Too many variables and emotions influence the spectacle. But you can take a general pulse of things, and for the upcoming IPO of China's Twitter-like microblog Weibo, it's not very encouraging.
Formerly Sina Weibo, now just Weibo, the company said it plans to soon MOREScott Cendrowski, writer - Apr 1, 2014 7:46 AM ET
Get up-to-the-minute developments from any screen connected to the Internet.
FORTUNE -- Couldn't make it to San Jose for the second "trial of the century"? Made it to San Jose, but couldn't get into U.S. District Judge Lucy Koh's courtroom to watch Apple (AAPL) do battle, once again, with Samsung?
Not to fear, Twitter is here.
Tweeting from courtroom are some of the best tech and legal reporters in the business (although expertise in one area doesn't guarantee it in the MOREPhilip Elmer-DeWitt - Mar 31, 2014 4:59 PM ET
Twitter's new features allowing users to post multiple photos and tag people in a single tweet go beyond the service's signature 140-character simplicity in an attempt to boost engagement. Is that a good thing?
By Courtney Subramanian
FORTUNE -- It's no surprise that the most retweeted tweet of all time was Ellen DeGeneres's celebrity-studded photo from this year's Academy Awards ceremony, with 871,000 retweets in less than an hour. Before that social experiment, U.S. president MOREMar 31, 2014 12:52 PM ET
They know how to connect with people they already know, but aren't as good at using social media to boost their careers.
By Ryan Holmes
FORTUNE – They're the generation brought up on Facebook. Some have never known a world without the Internet. The innermost details of their lives have been exhaustively Instagrammed, and they get their news from Twitter, not TV.
But when it comes to using social MOREMar 28, 2014 12:13 PM ET
|General Mills reverses course on right to sue after backlash|
|5 people you might not tip (but should)|
|Pope Francis challenges the free market - The Buzz|
|Stocks: It's report card time on Wall Street|
|Your Internet security relies on a few volunteers|