One week ago yesterday we reported that red hot microblogging service Twitter was rumored to have acquired real time sentiment search engine Summize. This morning the deal was confirmed by both companies.
Summize will now power search.twitter.com and its popular API will be folded into the Twitter API. All five Summize employees will move to San Francisco and work for Twitter. That's great news in the product development department; we should see some really exciting things come out of this deal.
]]> Last week Om Malik wrote that Summize could help Twitter begin to develop a business model. We've long contended that data mining and sales were the ideal path to monetization of Twitter. Just as video conversation startup Seesmic tells us it's been experimenting with lightweight focus groups for big companies, any of the most effective conversation platforms online could provide this kind of intelligence for a fee.We expect to see some things come out of this deal that can't be foreseen today.
The one thing that remains a mystery is the acquisition price. Twitter hasn't raised a huge amount of money and Summize had almost a million dollars in funds raised itself. What percentage of its coffers did Twitter just spend on all the Summize technology and five employees? It's probable that Summize investors saw their investments in Summize turn into favorable investments in Twitter, rather than a pile of cash. When one startup buys another one, though, one always has to wonder. It's usually a sign of desperation on the part of the acquired company - but that's not likely the case here.
We'll see what they can do together! Here's the Summize blog post about the deal, which is much more interesting than the relatively simple Twitter post about it. Twitter co-founder Evan Williams did an interesting interview about the deal with TechCrunch's Michael Arrington while at FOO Camp. The video was just released today and is worth a watch.
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