Updated Dec. 2, 2013 9:30 p.m. ET
Apple Inc. AAPL +2.74% Apple Inc. U.S.: Nasdaq $566.32 +15.09 +2.74% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 15.56M AFTER HOURS $568.00 +1.68 +0.30% Dec. 3, 2013 7:59 pm Volume (Delayed 15m): 545,362 P/E Ratio 14.19 Market Cap $495.96 Billion Dividend Yield 2.15% Rev. per Employee $2,127,850 12/03/13 Corporate Bond Sales Push Furt... 12/03/13 Apple's 2013 Acquisitions: Map... 12/03/13 Morning Links: Missing Out on ... More quote details and news » is looking for more of a social life.
Apple recently acquired social-media analytics firm Topsy Labs Inc. for more than $200 million, according to people familiar with the matter.
Topsy specializes in analyzing the global conversation on Twitter. TWTR +1.45% Twitter Inc. U.S.: NYSE $41.37 +0.59 +1.45% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 5.76M AFTER HOURS $41.49 +0.12 +0.29% Dec. 3, 2013 7:43 pm Volume (Delayed 15m): 14,365 P/E Ratio N/A Market Cap $22.97 Billion Dividend Yield N/A Rev. per Employee $267,231 12/03/13 With IPOs, SEC Focuses on Chea... 12/03/13 Data Sift Raises $42 Million f... 12/03/13 Morning Links: Missing Out on ... More quote details and news » Its tools can decipher how often a term is tweeted, find an influential person on a specific subject, or measure the exposure of an event or campaign.
The company is one of a handful of Twitter Inc. partners with access to the so-called "fire hose"—the full stream of tweets since 2006, which now average roughly 500 million a day. Topsy then analyzes this information and resells it to customers.
Apple Additions
Some acquired technology has quickly made its way into Apple products:
P.A. Semi (2008)—Chip firm helped design microprocessors now used in iPads and iPhones
Siri (2010)—Voice-activated search app became a central feature of iPhone 4S in 2011
C3 Technologies (2011)—3-D maps became key feature of Apple's iOS 6 mapping service
AuthenTec (2012)—Fingerprint-reader technology was added following year to the iPhone 5S
Industry executives said it was unlikely that Apple and Topsy would have agreed to a deal without Twitter's blessing.
A Twitter spokesman declined to comment. Topsy didn't respond to requests for comment.
An Apple spokeswoman confirmed the deal but wouldn't comment further. "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," she said.
Apple's goals for Topsy are unclear. Analysts said Topsy's insights could be useful in several Apple services, including the iTunes media store, Siri voice assistant or iAd advertising platform.
Susan Etlinger, industry analyst at Altimeter Group, said Topsy's analysis could help Apple recommend songs, movies and TV shows to iTunes users. Topsy engineers could help Apple learn how to extract similar insights from other large data sets.
Apple "could benefit from a more forward looking view of what people's interests are," Ms. Etlinger said. "Twitter is optimized for understanding conversations around entertainment."
People in the online-ad industry said this offers advertising opportunities for Apple's iTunes Radio, an online-streaming-music competitor to services from Pandora Media Inc. P +0.07% Pandora Media Inc. U.S.: NYSE $28.27 +0.02 +0.07% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 4.55M AFTER HOURS $28.45 +0.18 +0.64% Dec. 3, 2013 6:13 pm Volume (Delayed 15m): 5,367 P/E Ratio N/A Market Cap $5.49 Billion Dividend Yield N/A Rev. per Employee $795,041 11/21/13 Spotify Hits a High Note: Valu... 11/21/13 Pandora Media Posts in 3rd-Qua... 09/19/13 Pandora Extends Rally After St... More quote details and news » and Spotify AB.
One analyst said Topsy's data could benefit a range of Apple partners, including media companies that provide content to the iTunes stores, developers who create apps for iOS, and advertisers in iAd.
"All of these businesses would appreciate having access to more of this real-time data," said Debra Aho Williamson, principal analyst at eMarketer. "Now Apple has a new tool to help the companies that use its services become better, smarter marketers."
Apple has been wrestling with a tepid response from marketers for iAd, which was launched in 2010 to sell ads within mobile apps on iPhones, iPads and iPods running on the company's iOS software.
Apple initially required advertisers to spend $1 million in an iAd campaign. It has since lowered that threshold to $100,000 per campaign in an effort to broaden its appeal to advertisers.
Topsy, which competes with startups such as DataSift Inc. and Gnip Inc., also could help Apple better monitor the social-media conversation around its products including targeted advertising on iTunes radio or Apple's iAd platform.
Another possible application of Topsy's technology is to refine the search feature in Apple's Siri voice assistant in the iPhone and iPad. Siri already asks users to access their Twitter account to personalize search results. Apple has purchased at least one other startup with expertise in search. It paid more than $50 million last year for Chomp Inc., a tool for searching mobile apps.
The acquisition marks Apple's latest foray into social networking, after past missteps. Its Ping music-sharing service was closed last year after it failed to excite users.
Apple last year made it easier for users of its devices to share photos and messages on social networks including Twitter and Facebook FB -0.70% Facebook Inc. Cl A U.S.: Nasdaq $46.73 -0.33 -0.70% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 31.82M AFTER HOURS $46.67 -0.06 -0.13% Dec. 3, 2013 7:59 pm Volume (Delayed 15m): 267,965 P/E Ratio 108.67 Market Cap $115.52 Billion Dividend Yield N/A Rev. per Employee $1,487,770 12/03/13 Snapchat Snags Instagram Exec 12/03/13 Facebook Exec Offers Glimpse I... 12/02/13 Facebook Tweaks Its News Feed ... More quote details and news » without opening those apps.
Topsy was founded in 2007 by Vipul Ved Prakash, a former Napster Inc. engineer who had founded Cloudmark, a company specializing in anti-spam software. In 2011 it brought on Duncan Greatwood, a former Cisco Systems Inc. CSCO +0.81% Cisco Systems Inc. U.S.: Nasdaq $21.26 +0.17 +0.81% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 50.84M AFTER HOURS $21.20 -0.06 -0.28% Dec. 3, 2013 7:43 pm Volume (Delayed 15m): 1.66M P/E Ratio 11.49 Market Cap $112.76 Billion Dividend Yield 3.20% Rev. per Employee $650,455 11/21/13 Software Defined Networking (S... 11/19/13 A Lonely Short-Seller Still Pl... 11/18/13 Not Your Dad's Nasdaq More quote details and news » executive, to be CEO.
Since its founding, Topsy has raised more than $32 million from investors including BlueRun Ventures, Founders Fund Management LLC and Ignition Partners. It also arranged $3 million in debt from Western Technology Investment LLC, according to Dow Jones VentureSource, a service owned by Wall Street Journal parent company News Corp. NWSA -0.85% News Corp Cl A U.S.: Nasdaq $17.50 -0.15 -0.85% Dec. 3, 2013 4:00 pm Volume (Delayed 15m) : 3.09M AFTER HOURS $17.50 +0.00 +0.02% Dec. 3, 2013 4:27 pm Volume (Delayed 15m): 33,921 P/E Ratio N/A Market Cap $10.22 Billion Dividend Yield N/A Rev. per Employee $367,917 11/26/13 Rebekah Brooks Described How t... 11/21/13 NBCUniversal Close to Minority... 11/21/13 The Celtic Tiger Purrs: Irelan... More quote details and news »
Earlier this year, Topsy enhanced the ability to track tweets by the geographical location from which they were sent.
Using references to landmarks or local events, Topsy says the service can identify the country of origin for about 95% of tweets and the city of origin for close to one-quarter of all tweets.
—Elizabeth Dwoskin and Yoree Koh contributed to this article.
Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com and Douglas MacMillan at Douglas.Macmillan@wsj.com
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