Microsoft’s recent purchase of LinkedIn for a reported $26.2 billion may be the biggest acquisition news so far in 2016. But Twitter is betting that its own recent acquisition of Magic Pony Technology – a neural networks/machine learning company – for a mere $150 million will pay big dividends down the stretch.
Commenting on the acquisition in a recent Twitter blog, Twitter CEO and co-founder Jack Dorsey said, “Machine learning is increasingly at the core of everything we build at Twitter.” Dorsey went on to say that, “Magic Pony’s machine learning technology will help us build strength into our deep learning teams with world-class talent, so Twitter can continue to be the best place to see what’s happening and why it matters, first. We value deep learning research to help make our world better, and we will keep doing our part to share our work and learnings with the community.”
Magic Pony Technology is the third machine-learning startup that Twitter has acquired since Madbits in 2014, which begs the question: Why is Twitter so heavily focused on machine learning? As it turns out, there are three very good reasons.
Enhanced Video Quality
It’s no secret that Twitter has been fighting an uphill battle to attract and retain an active user base. In February of this year, the social media company reported that it lost 2 million users in the last three months of 2015. And while a number of tech pundits have suggested various reasons for Twitter’s slump, among the most logical reasons that Twitter has acquired Magic Pony is to get the company out of that slump by enhancing video quality.
That bet could pay off, because Magic Pony’s technology is capable of recognizing patterns and textures to automatically enhance the quality of blurry video images captured with low-resolution cameras. By improving the quality of videos that are shared on its site, Twitter is looking to improve the experience and enjoyment of its users, a strategy that the company hopes will attract more users and keep them engaged.
Real-Time News Reporting
One of the key challenges of big data analytics is to capture, process, index, and categorize vast volumes of unstructured data, such as pictures and videos. With the acquisition of Magic Pony and its crack team of skilled data scientists, Twitter now has the analytics muscle to become the leader in real-time news reporting.
Armed with the ability to collect in close to real-time all user-created video and pictures surrounding a specific newsworthy event and incorporate it all into a single high-quality stream accompanied by live commentary, Twitter – or a business that licenses its technology – could become the go-to source for breaking news. And this news would be seen through the virtual eyes of those who are at the scene as events unfold, constituting a compelling format that could drive huge ad revenues.
Right up there with hyper-converged infrastructure vendors, machine learning and neural networks that work like the human brain are hot big data topics these days. And the acquisition of Magic Pony, which specializes in machine learning and neural networks, could help Twitter move beyond hashtags and text analytics into the realm of deep learning. With this capability, Twitter could become an intelligence services vendor to organizations looking to leverage the benefits of applying machine learning algorithms to their own Twitter streams.
In addition, Twitter could use deep learning technology to identify people, places, and things in photos and video, profiling users for more personalized, targeted, and engaging advertising messages. Thanks to Magic Pony’s machine learning technology, Twitter has the capability to branch out into areas that could prove to be far more valuable than its beginnings as a short text comment platform.
Startup acquisitions have been and will continue to be smart business strategies for advancing the agendas of mega-companies such as Microsoft, Google, and Apple. With its own recent and modest startup acquisition, Twitter has high hopes that Magic Pony will put it in the winner’s circle.
Rick Delgado is a technology commentator and freelance writer.
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