Twitter Buys Analytics Startup BackType

Should competitors be worried, or relieved?

It looks like Twitter will soon be offering more services to publishers using the messaging service, based on Tuesday's news that the company has acquired analytics startup BackType.

BackType's products include BackTweets, which helps publishers and other businesses see who's tweeting about them and whether those tweets translate into website visits. The startup, whose investors include True Ventures and incubator Y Combinator, says that its team will be joining Twitter to develop new publisher tools.

It sounds like Twitter will be winding down the use of BackType's products. BackTweets will still be available for free to existing users, but it's no longer open for new sign-ups. Other products will be discontinued, and BackType says that its technology will be incorporated into Twitter—particularly Storm, its system for processing the Twitter stream in real time.

The move might seem like another instance where startups who develop services on top of Twitter are now competing with the platform company. Back in March, Twitter's platform director Ryan Sarver wrote that if developers don't want to compete with Twitter, they're better off focusing on publisher tools and other backend services, rather than apps for consumers. So startups who followed those instructions and focused on analytics tools might now feel a little miffed. But this isn't the first time Twitter has shown an interest in this area. It already experimented with an analytics dashboard of its own, and it previously acquired another analytics company called Trendly.

As Twitter offers more services for publishers, should startups selling their own publisher tools (like Sulia) or other analytics products (like Klout) be worried? Sarver said via email that there's still a lot of opportunity here for companies besides Twitter: "With 200 million tweets a day, the market demand for Twitter insight is high."