BLUEFIN LABS: THE ACQUISITION BY TWITTER

ANANDA DAS GUPTA D011

HARSH GARG D017

KISHALAY DATTA D

RUDRAKSH MAHAJAN D037

VIPUL MATHUR D038

VISHAL SINGH D

INTRODUCTION – BLUEFIN LABS, TWITTER, CASE FACTS

Founded in 2008 by Michael Fleischman and Deb Roy

The company has its origins in research done at MIT on human language development

When Michael Fleischman joined the research group, he adapted the analysis on human language development to broadcast video

The company’s technology goes beyond normal data collection and understands contexts in a way similar to human minds. An example will make this clear

BLUEFIN LABS

A person posts the comment "Awesome pass!" in social media. Any person who reads this comment in the right context – let's say during a fall Sunday in New England at 2:45pm – will correctly infer that the words are about that Tom Brady pass in that Patriots football game.

Bluefin’s machines are capable of inferring this

Twitter is a social networking and microblogging website founded in 2006

The company had ~$350 million as revenues in 2012 and had 200 million active users by March 2013

The company also recently went public

Twitter acquired Bluefin labs in early 2013 and recently also acquired another social media analytics firm “Trendrr”

TWITTER

The case talks about the two companies, social TV and Twitter’s acquisition of BlueFin Labs for a sum of ~$90 million

Social TV is a term for technology that facilitates communication or social interaction in either the context of watching TV or related to TV content

The case also talks about companies such as Bluefin labs that monitor

CASE FACTS

BLUEFIN LABS – EVALUATION OF DECISION TO SELL

Twitter was the main source of data for Bluefin labs

Digital media is changing at breakneck pace and in case something changes, either twitter stops releasing its data to outside agencies or people stop using twitter then Bluefin would have been in trouble

The company had already raised $20.5 million in funding and continuing with the company would have been a major risk

Nielson had a very stable platform to work with and it continually kept improving its offering but kept the base same i.e TV

Decision to sell

We believe that Bluefin labs will not be able to serve as a rating agency like Nielson

Nielson is an independent agency providing information on all brands at all times and not those that are associated with it

However, if Twitter can form Bluefin as an independent company and just as a majority owner then this might be possible

Nielson also has certain brands purchasing its services, yet it manages to release unbiased data for all the brands

Independent ratings agency

TWITTER – ACQUISITION JUSTIFIED?

Twitter unlike FB in case of advertisements and focuses more on a two way interaction between the brands and a consumer rather than display ads

Bluefin labs provides Twitter with an excellent return on investment option as the company will be able to justify ad spend using Bluefin’s state of the art technology

Moreover, the technology has been tested by client and is not in beta phase

Bluefin will enable Twitter to pitch real time two way communication between clients and users. E.g. A Vodafone ad plays on TV and a person tweets on the ad (negative or positive). The company can immediately respond to the ad even though the user may not use “hashtags” or “@” option

Twitter has recently gone public and the company is valued at $31 billion. As of now the company is cash rich. However, it has to build a strong revenue model in order to sustain. Tools like Bluefin and Trendrr will help twitter to show ROI to its advertisers and hence make the sales pitch much more effective

REFERENCES

https://blog.twitter.com/2013/celebrating-twitter7

https://bluefinlabs.com/thesciencebehindit/