Summary
Twitter is talking about data mining opportunities with Microsoft and Google, but this won't lead the company to its objective of defining consumer "engagement" with brands. Also, monetizing this data remains abstract outside of the search engine "last click" model.
Analysis
As some of my other colleagues have pointed out, there is a massive data extraction issue in Twitter -- namely in defining the context of tweets and relating that data to products, brands and marketing campaigns.
The current model for Internet search pays the site that provides the "last click" before a user travels to a specific site. Advertisers pay substantial dollars (roughly half of all online advertising revenues) for Internet search. As such, Twitter will have a tough time defining the value of its data and the amount that Google or Microsoft will have to pay for the improved search that may (or most likely may not) result from Twitter data.
More realistically, Twitter data will be similar to that provided from other advertising networks or niche content providers.
And since Twitter has announced that the company seeks to define user "engagement" with brands, the bottom-of-the-funnel, intent-driven, direct-response world of Internet search isn't going to get them any closer to the abstracted, brand-driven world of consumer engagement.
Meanwhile, Twitter will invest time and energy serving the needs of Google and/or Microsoft, and they're not going to get much closer to their corporate goal. Instead, Google and/or Microsoft will be using access to Twitter's data (and teams of statisticians and data mining experts) to make the determination whether Twitter is actually a threat or a potential acquisition candidate.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
