Why Google should want Twitter: Currency

Here‘s a good clue as to why Google should be interested in Twitter. It’s not just search. It’s currency. Google isn’t good at currency. It needs content to ferment; it needs links and clicks to collect so PageRank can determine its value.

But in this report (full PDF here), Google chief economist Hal Varian and analyst Hyunyoung Choi demonstrate that Google search trends are good at predicting the present. That is, rather than waiting weeks or even a month to get aggregated figures on auto, retail, home, or travel sales to be collected and analyzed and released, Google search patterns can give a good indication of sales now.

Note that to do that, Google’s value is not in its analysis of content but in its collection of our behavior, which is faster.

Of course, Twitter is even faster, even more immediate. It collects what we’re doing and talking and thinking of doing right now. I’d love to see Varian et al take its data and put it through their algorithms.

Imagine the value of that knowledge, harnessed, for retail and manufacturing forecasting, stock and currency trading, and politics. There’s the vein of value in Twitter. Monetizing it may not come from advertising but from knowledge.

When analyzing the value of enterprises in the digital economy, it’s important to figure the value of its knowledge. I argue in my book that Amazon is really a knowledge company, that delivering books and stuff – atoms – is the price it pays to know more about our shopping than any other company on earth. Google knows the most about what we’re looking for. With maps and mobile, Google is also trying to be the company that knows where we are. Facebook knows the most about our relationships. And Twitter is headed to knowing more about what we’re doing and thinking. (Next: just wi-fi the brain.)

  • Kyle

    Ironically or not, the NSA is reportedly tapped into all domestic and international communications running through the AT&T building downtown San Francisco – talk about datamining – however I wonder if Google is tapped too? Would make a lot of sense……

  • http://www.suchitaambardekar.blogspot.com Suchita

    Quote and observation about twitter is perfect ….

  • http://thenumerati.net steve baker

    The key will be to link Twitter to a geo service, like Google’s latitude, so that they can know not only what we’re thinking, but where we are (and whom we’re with) when those thoughts occur to us.

  • http://ouriel.typepad.com Ouriel Ohayon

    This is precisely what i wrote about 3 days ago when i said that google should buy google because of a growing passionate community of link sharers/clcikers

    more here

    http://ouriel.typepad.com/myblog/2009/04/want-to-know-why-google-wants-to-buy-twitter.html

  • http://www.twitter.com/willwalmsley willwalmsley

    Your thinking about it like a businessman. The wider ramifications if Google attains Twitter are more pronounced than most people think. Competition is healthy but Google keeps eating theirs.

  • http://annbrocklehurstjournalism.blogspot.com Dog Twitteret

    Twitter, twitter, twitter.

    Stop, stop, stop.

    I keep hearing three arguments of why Twitter is so great

    1) Real time search: Common example — first to have photo of plane in Hudson, Well, good on them, but minutes later, the story and the picture were all over and linked from a myriad of sites that had far better coverage of the whole event. Really, who cares if the picture was on Twitter one minute before it was somewhere else?

    Google still does real time search — blog, news and trends — better than anyone else. And with sources that are far more valuable than 140 character tweets.

    Also, last time I tried to find Twitter search from their home page, I couldn’t so I had to find it with Google. Hmmm.

    2) PR people are monitoring Twitter to know what’s being said about their brands. Yeah, because they can charge their clients a healthy fee for a service that takes two minutes of their day and which they should be finding on their Google Alerts.

    3) I got restaurant recommendations from Twitter. This only happens to the people who have a gazillion followers. The Twitter everyperson will get nothing from Twitter. Their tweet will not be heard by the chirping masses.

    4) If everyone’s doing it, there must be somethig to it. As Eric Schmidt says it’s a glorified and poor man’s email system.

    ———-

    Honestly, I’ve been on Twitter on and off for a year and find it totally useless.

    • http://www.frontseat.org Mike Mathieu

      Who cares about having the info first, even if it’s just by a minute? Start with traders and Dept. of Defense. And they would pay a lot for it.

      The same criticisms could have been said about Facebook a few years ago, or frankly, MS-DOS or PC’s when they first came out. It’s part of the nature of disruptive innovation – it stinks at what the incumbent is great at (search, speed, stability, etc.) but does one thing really well that it difficult or impossible for the incumbent to do without starting over or abandoning some of its existing competitive advantage (instant access to info.)

      Twitter has problems for sure, but it’s charting a disruptive course that represents the single biggest competitive threat to Google’s golden egg.

  • http://polyvore.com pasha sadri

    this is probably why google acquired blogger when blogs were the primary source of ‘current’ content and links being created.

    in fact, for a while blogs had a disproportionate influence on google’s ranking, (probably because of some higher internal google ranking weight?). eventually, the signal/noise ratio in blogs dropped as people started to use them to spam search engines.

  • http://annbrocklehurstjournalism.blogspot.com Dog Twitterer

    I think Blogger is also a tremendous source of valuable data.

  • Mike Manitoba

    Why are people talking about Twitter likes it’s some new phenomenon?

  • http://www.clickequations.com/blog Craig Danuloff

    Great theory, except that the twitter stream is sku’d toward a very certain type of content, from a very self selecting (and I believe will remain so) population. IF everyone twittered everything, or would someday, you’d be right. I don’t think even a tiny percentage of that’s gonna happen.

    As a somewhat of a side note, I think twitter is already crashing (utility wise) under its own weight. Signal to noise ratios have plummeted and the whole thing will resemble CB Radio in the 70′s soon. I like it, but it don’t work when everyone’s playing (not to mention gaming it).

    • http://www.buzzmachine.com Jeff Jarvis

      Oh, I remember well when the internet itself was called nothing but CB radio.

      Whether it’s Twitter or Facebook successors, there will be ways to capture and learn from what we’re doing now and that will have value. Scoff and let others figure it out.

  • http://blaise.ca/ Blaise Alleyne

    Brief story (in response to the “Google does real-time search too” post). Last summer, I had heard about Ping.fm and I wanted to use it to keep both my Twitter and Identi.ca accounts active. But you needed a beta code.

    So I did a few Google searches. A found a ton of beta codes, some which had been posted to forums just a day or two prior. Great… except they had all been used up. I kept digging, but by the time a beta code appeared in a Google search, it was used up.

    So, I thought… what’s faster than Google?

    A search on Summize (now Twitter search) gave me a beta code that had been posted just a few hours before and I was in after a few minutes.

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  • http://www.martinwright.tv Martin Wright

    If you want to get a sneak preview of what Twitter will look like when bought by Google you can use Twitseek (http://www.twitseek.com) – it’s like Google for Twitter.

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  • http://thenoisychannel.com/ Daniel Tunkelang

    I love Twitter as an end-user. When it comes to community, Twitter beats Google any day. But, if my main interest were currency, I’d much rather have access to Google’s logs than Twitter’s. More in my post: http://thenoisychannel.com/2009/04/05/google-already-knows-what-youre-thinking/

  • http://www.ianwaring.com Ian Waring

    I use Twitter fairly regularly, but wonder if the signal:noise ratio is significant enough to be useful to discern useful trends. For me, it would have spotted the latest book i’m reading, a friends Marathon training session updates and the car i’ve just ordered, but I don’t see that from a lot of people.

    Quite a lot of the retweets borderline on SPAM, albeit some folks are better at useful “Hey, look at this”. Maybe there should be a PageRank for Tweets that uses the RT in vs RT out ratio (or a users propensity to RT per day) to order my list…

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  • scott oiler

    hi folks,

    in my opinion google should think about a bank than about buying twitter. with a free of use creditcard a google-bank will know whta the user buys.

    than google will know whta we search and what we buy, even they will know where we are…. why should google buy twitter to know what we think at the moment ?!

    big brother is watching you

    regards scott oiler

  • http://thenoisychannel.com/ Daniel Tunkelang

    Ian, if you want a PageRank for Twitter, check out TunkRank:

    http://tunkrank.com/

    It ranks users, not tweets, but like PageRank it models attention scarcity. You can learn more about it here:

    http://thenoisychannel.com/2009/01/13/a-twitter-analog-to-pagerank/

    • http://www.ianwaring.com Ian Waring

      Very good Daniel, but boy, do I need to go back to Statistics class.

      My main issue was being tweeted to death by Guy Kawasaki – who I think is great, I have all his books, but the volume of his RT’s (mainly about alltop) puts everyone else on Page 2. May have helped if I could just have his messages that a certain threshold were clicking through on. In the meantime, i’ve temporarily become a non-follower of his.

      Also recently saw Flutter http://tinyurl.com/cob8l5 . I’m still amazed by how much context you can get in six words http://tinyurl.com/yujuap so thought it may be true.

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  • James d.

    I remain intrigued by Twitter, and it’s got a lot of good selling points, but it was absolutely useless during the Binghamton shootings (my paper — I know, I’m still at one — is up the road from there).
    Thousands of tweets, with a third expressing condolences, a third saying “Holy (expletive) Binghamton!” and the other third linking to the same three or four news obvious news outlets.
    One event does not a platform make, but I expected something, anything, useful to come out of it. Maybe it was buried deep within those thousands of tweets, maybe not.

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  • Jim Knopf

    Thank you for yet another reason not to use twitter or anythink remotly like it :-D

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  • http://www.designerpandorajewelry.com dugang

    Thank you for yet another reason not to use twitter or anythink remotly like it

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