Why Apple’s Topsy Buy May Be All About Its Social TV Future

Twitter data firm offers glimpse into viewing habits

Apple raised eyebrows yesterday with its curious acquistion of the social analytics firm Topsy. While many have wondered what the deal is all about, many experts believe it points in one direction: the social television space.

Indeed, Apple is said to be working on a new smart TV that most industry watchers expect to be the next big hardware play from the company; Topsy Labs collects data from Twitter that potentially provides crucial insights into social media users' viewing habits.

And at first glance, Apple spending $200 million for a social media data company seems baffling, and there has been a wide range of speculation about what it means. Now, Topsy —which has the ability to sift through the big data pile of tweets and measure mass sentiment on the platform— could provide producers and advertisers tools for engaging audiences in a social way through television.

Twitter is increasingly TV's best friend: It is the place viewers go to converse about their favorite shows. “Twitter is the second screen experience,” said Sharad Verma, CEO of Piqora.

Topsy’s ability to make sense of that data carries major implications if Apple were to release a new television, Verma said. If Apple made Topsy data available to advertisers they could serve up marketing based on real-time conversations, Verma said. “It would make your ad feel more contextually relevant,” he said. “Part of the conversation.”

Topsy would also be an asset to content makers—i.e. networks and studios—that could introduce social elements into their shows as they stream on Apple’s platform.

“I wouldn't be surprised if the Topsy buy was particularly used by Apple to harness the power of Twitter for TV commentary,” said Thibaut Davoult of Nitrogram, another firm that specializes in social media analytics.

Apple’s latest acquisition also has been considered a talent grab, but for hundreds of millions of dollars it must be for much more than personnel, sources said. Topsy gives Apple deeper insights into social media and Twitter, a close partner on hardware devices. The messaging platform is featured prominently and tightly integrated within Apple's operating systems.

On mobile alone, Topsy simply helps Apple understand real time trends that could help deliver more relevant experiences for iPhone users. “It's all part of the fabric of this uber-connected world we live in,” said Apu Gupta, CEO of social data firm Curalate. “Apple could weave social into their devices and experiences in a way that will feel native to the device.”

The Topsy purchase was welcomed by some on Wall Street who say Apple needs to move beyond hardware. Topsy introduces opportunities in software, including the potential to boost search through the voice-activated assistant Siri. Topsy’s data could also improve the Apple App Store with better recommendations.

“I like to see Apple picking up the pace of these tuck-in acquisitions,” said analyst Colin Gillis of BGC Partners. “There are plenty of areas for Apple to expand.”