Brought to you by: ZOG Digital
Data is integral to every component of Twitter's business. Yet the firm breaks out revenue generated through data sales in a category called "data licensing and other." While the "other" includes revenue from mobile app ad exchange MoPub as well as other undisclosed revenue sources, one thing is clear -- that revenue is growing.
In its Q2 2014 earnings report, Twitter said its "data licensing and other" business grew 90% year-over-year to $35 million, or around 11% of its total $312 million in revenue in Q2.
"This line item includes significant contributions from both our mobile ad exchange and the Gnip data-licensing business," said Mike Gupta, Twitter CFO, during yesterday's earnings call with investors.
Twitter sells various forms of its data to social-media analytics firms and brands interested in knowing what people are saying on Twitter about their products and services. It makes that data, whether it be its all-encompassing "firehose" of information or slices of it, available through authorized resellers, including the one it acquired in April. The second-quarter report is the first to factor in direct revenue from that reseller, Gnip.
"Twitter is now directly monetizing the relationship with the analytics companies that use that data, so it's just moved that revenue in-house," said Jan Dawson, chief analyst at Jackdaw Research.
Twitter won't reveal how its "data licensing and other" segment is portioned. By including MoPub revenue in the category, it appears Twitter aims to distinguish revenue created by the Twitter product itself from money earned by the company through its other assets, suggested Mr. Dawson.
In addition to revenues from MoPub's ad sales, the app exchange could be selling "trend data or aggregated performance data, that kind of thing," said Mr. Dawson.
In the future as its disparate businesses bloom and intertwine, categorizing them this way may prove difficult. Continued Mr. Dawson, as Twitter attempts to "cross-pollinate" its technology platforms to help advertisers connect with users on all of them, "It will be harder and harder to separate the two over time."
Stephanie Newby, CEO of social analytics firm Crimson Hexagon, expects Gnip to further diversify the data products and packages it offers in order to attract new clients. Crimson Hexagon is one of a relatively small number of companies that pay to receive the entire Twitter data feed, a.k.a. the firehose. In the future, Gnip might offer Twitter information in smaller, customized data sets for companies who don't need or can't handle that amount of information, she said.
"Through the analytics [Gnip] provides around the extraction of data, you can put in a couple keywords and extract the data for example," she said. "[Twitter is] very supportive…. They want to encourage more companies that add value on top of the data they provide."