With Summize, Twitter to Buy a Clue

The big buzz of the evening is that Twitter, a San Francisco-based startup that allows anyone to post short (up to 140 characters) messages to its platform and thus broadcast them to one or many using different media such as web and mobile, is about to acquire Summize, a Potomac Falls, Va.-based startup that uses the Twitter API to search and find relevant messages on Twitter.

The rumors of the deal were first reported by a little-known blog (not anymore, of course) by Josh Chandler. Subsequent to the news, I made a few phone calls and did confirm that it is not just a rumor and a deal is certainly in the works. It is likely to be announced as soon as next week. I’m still trying to dig up the financial details and will report further when I get hold of them.

The deal would be a good move by Twitter, and would be putting some of its recently acquired $15 million in VC funding to decent use as it would help the company get hold of of a business model. Here is why. Most people think of Summize as a Twitter search utility, and it is a mighty fine search service. It is so good that there are nearly half a dozen other startups using the Summize API. At first blush, it seems like Twitter could bolt on search on their platform and make it more useful. I think it would be thinking about Summize in a limited sort of a way.

“We monitor collective attitudes being expressed right now on the web,” is how Summize describes itself. In other words, it can quickly look at data coming from conversational sources — RSS feeds and Twitter tweets — and offer a quick opinion as to what is being talked about. For example on this page you can find out what people really think of this deal between Summize & Twitter deal. All the data is coming from the Twitter stream.

In a conversation earlier this year, CEO Jay Virdy, formerly of AOL, told us that they had developed a way to geocode public timeline tweets (short messages). This allows one to find out what people are saying about John McCain in Phoenix vs. San Francisco.

In other words, Summize has come up with a clever way of peering through Twitter’s vast data stream and finding out what’s hot, where and how. The results are essentially keywords — topic-, person- or location-based — and thus can be used to show contextual advertising next to the pages that show these results. Summize has thereby developed an ability to monetize conversations without being intrusive.

Summize could have easily done this on its own and started to make money. It would surely need to compete with Twitter for attention and figure out ways to keep generating more traffic. Instead, if Summize is bolted onto Twitter, that can help the tiny startup get instant traction.

Just as AdSense serendipitously turned Google into a giant cash register, with Summize, Twitter can take the first step towards a business model. Of course, Evan Williams & Co. have to quickly figure out a way to fix their patchy-at-times service before everyone decides to switch loyalties to one of the many Twitter rivals currently being plotted by clever minds.

P.S.: Since Twitter doesn’t want to charge me for having too many followers, and it doesn’t cost me anything, go ahead and follow me on Not that you are going to read the tweets anyway :-)

P.S.#2: My jet lag has finally hit so if you notice errors/mistakes, please excuse my tardiness. I will rectify when I wake up.