Bluefin Labs: The Acquisition by

Twitter
Case Analysis
Ahir Mahmood
1009429129
Professor Tarun Dewan
Executive Summary

Bluefin Labs is an organization founded by Deb Roy and Michael Fleischman to

provide information to advertisers and TV networks. This information was
attained through the procurement of data from social networking sites such as
Twitter. Data is then analyzed to observe and evaluate social TV which is a
combination of television and social media for individuals who use a smartphone
or tablet while viewing television. Since numerous people around the globe
have become real-time TV watchers it is crucial to gauge audience engagement
and not just media consumption. So, Bluefin Labs executed this business plan
efficiently allowing it to tap into a niche market of assisting companies by
molding their marketing strategies. However, 18 months after Bluefin’s launch
of its first commercial product Twitter obtained Bluefin Labs for a price of $70-
$100 million in February 2013. This is an evaluation case because Bluefin Lab’s
issues and choices will be utilized to evaluate whether the acquisition of Bluefin
Labs by Twitter is beneficial or detrimental.

SWOT Analysis

Strengths Weaknesses

● Bluefin Labs is in a niche market ● Bluefin is not a big organization

because a few amount of
advertisers or TV networks
utilize the data analysis of
social TV.
● Bluefin has a reliable source for
data which is the third-largest
social networking site globally
known as Twitter.
● Bluefin offers programming
since it only has 60 employees
and 30 clients.
● Bluefin’s small amount of
clients is a weakness because
Twitter has announced that
Bluefin cannot pursue new
clients under the acquisition.
● Bluefin has only one reliable
source for Data which is
 data in real time to a company’s
online dashboard.
● Bluefin has no scarcity of data
because 40 million people are
partaking in social TV from the
U.S.
Opportunities
● Social Media is constantly
evolving and growing so there
will always be more data such
as posts, comments, mentions,
and tweets to gather and
analyze.
● The ability to research and
discover unique ways to
analyze data such as affinities
which can then be used to
differentiate Bluefin from other
companies in the market such
as Nielsen.
● Bluefin is a vital tool for Twitter
since Twitter is the main
platform for individuals to
express their sentiments about
advertisements/brands and
partake in social TV.
Background - The 3 C’s: Company, Competition, Customer
Company
Twitter.
● Twitter’s data is not specialized
for U.S. citizens because it is a
global networking site and this
negatively impacts Bluefin
because most clients for Bluefin
are U.S.-based companies.
Threats
● Competitors such as Trendrr
and Nielsen’s SocialGuide are
capable of acquiring more
market share.
● Privacy has become a safety
concern among social media
users so individuals are
becoming more aware of what
they disclose on social media
which can lower the amount of
data available for Bluefin.
● Nielsen’s recent purchase of
SocialGuide was to monitor
data on
● Nielsen and Twitter’s recent
joint venture can spark more
rivalry and competition
between Nielsen and Bluefin.
Deb Roy was a professor at the Massachusetts Institute of Technology(MIT) and
was responsible for managing the Cognitive Machines group at the MIT Media
Lab. He became recognized for his three-year project which consisted of the
video and audio recording of his son since birth in 2005. This recording included
250,000 hours of his son progressively acquiring language. So, Deb Roy
attended a TED conference talk in which he stated the progression of his son’s
ability to pronounce the word water. Afterward, Michael Fleischman gained
credit from Deb Roy as his research collaborator for the three-year project and
as Bluefin’s cofounder. Michael Fleischman became Bluefin’s cofounder because
of his suggestion that machine learning can pinpoint how a toddler began to
speak the word water. Then machine learning can be capable of recognizing the
discussion of products, brands, and programs among consumers during
exposure to TV content. Which made Deb Roy take a leave of absence from MIT
to create Bluefin Labs as a startup in 2008. Bluefin operated by accessing live
TV through a satellite which identified advertisements and shows to match
stimuli from TV to discussions from social media on social networking sites.
Also, the context of a conversation did not matter because the machine learning
algorithms kept improving Bluefin’s semantic technology as it kept on observing
to uncover what individuals were discussing on social media. So, Bluefin
collected data at an amount of 2.5 million minutes of TV programming a month
which included over 2 million distinct advertisements and 5 billion comments on
social media platforms a month.

Competition

Within the niche market of social TV analytics, there are two main competitors
against Bluefin which are SocialGuide and Trendrr. SocialGuide is a company
purchased by Nielsen to utilize the real-time Social Programming Guide(SPG) to
classify TV programs by ongoing social media activities of those on a given
network. Also, SocialGuide monitors first-run movies from pre-release through
video-on-demand, theatrical runs, and DVDs. Fortunately, SocialGuide is
capable of only providing a summary of social TV data unlike Bluefin, an
organization that can supply a comprehensive analysis of social TV data. There
are three main reasons why Bluefin is capable of executing an in-depth analysis,
unlike SocialGuide. Firstly, TV program and channel analysis allowed Bluefin to
demonstrate that audience preferences and demographics changed for the
same TV shows among different channels. Secondly, advertising interpretation
allowed Bluefin to occasionally suggest that the message conveyed by an
advertisement has changed if the program where the advertisement is meant to
appear has changed. Thirdly, advertising effectiveness allows advertising
campaigns to immediately determine their success in an advertisement. Bluefin
achieved this by analyzing the social media data stream to see if individuals who
mentioned the brand had also mentioned their attitude or behaviour that
advertisers were hoping to generate.

Trendrr is a company that can track program content on the same level as
Bluefin because of its sophisticated system. Through the use of real-time
dashboards, Trendrr can identify demographics, influencers involved within
products or brands, volume, sentiment, location, and the speed of link
distribution on the social web. Also, Trendrr can monitor news aggregators,
microblogs, commerce, social networks, video sites, and marketing or sales
campaigns through blogs. However, Bluefin differentiates itself from Trendrr
through the application of affinity. Affinity examines the connection between a
brand and a TV show or in the middle of TV shows. Affinity allowed advertisers
to find out two important pieces of information. Firstly, knowing which TV
shows are correlated to a brand can inform advertisers during which TV shows
they can advertise their product or service. Secondly, it can assist advertisers in
figuring out when they should advertise their brands.

Customer
Bluefin has two main market segments which include broadcasters of TV
content and advertisers. So, Bluefin provided a service for broadcasters by
enhancing conventional audience data sources such as Experian Simmons which
is a survey of audience lifestyles and demographics, and Nielsen TV audience
tracking panels. The two data sources gave broadcasters the ability to measure
the demographics and magnitude of a program’s audience. Then the
broadcasters would sell this information to advertisers who want to reach
specific market segments. Now Bluefin enhanced this by making their
programming data accessible in real-time, unlike conventional data sources that
take up to six months to publish their reports after collecting their data.

Advertisers are another market segment that Bluefin serves because Bluefin has
the capability of tracking all national advertisements through its data. By
tracking these advertisements Bluefin was able to inform advertisers when an
advertisement produced brand mentions on a social networking site. Also, the
positivity or negativity of an opinion that an individual has developed within
brand mentions could be assessed. Finally, Bluefin could determine the quality
and quantity of mentions for advertisements when they are placed in certain
programs compared to other programs.

Recommendations

Options Benefits Risks

Improve the services ● If executed ● Clients would
being offered at Bluefin appropriately always perceive
by increasing the Bluefin services the information
representativeness of have the potential provided by
volume and sentiment to become a Bluefin as
indicators necessity as a unreliable because
company for TV the data can be
broadcasters and tainted.
 advertisers. ● Twitter might
● Bluefin can need to invest a
increase its large amount of
resources for data capital to achieve
by implementing this goal and
the same enough return
algorithm into would not be
different social acquired to match
networking sites investment.
such as Facebook,
Linkedin, etc.

Execute a merger ● Twitter is ● Bluefin will not

between Bluefin and currently in a joint have full control of
Nielsen’s SocialGuide venture with its brand or
Nielsen so business anymore
accomplishing this instead control
merger will show will be split
the media that according to both
Nielson and parties.
Bluefin are not ● Bluefin could incur
competitors a lot of debt
anymore because because of
both companies Nielsen’s financial
are now involved situation which
with the same has not been
entity. disclosed yet.
● The resources
provided by
Twitter with data
and knowledge
from Nielson and
Bluefin combined
can allow Twitter
to make a
company that
 measures the
success of
advertisements on
TVs and other
social networking
sites.

Utilize Bluefin’s machine ● Twitter can use ● Bluefin will not be

learning capabilities to Bluefin’s machine able to give its
strengthen Twitter’s learning to undivided
marketing strategy monitor the attention to its
effectiveness of clients anymore
advertisements since the company
among users or will have to
the success of prioritize the
providing needs and wants
marketing services of Twitter.
to advertisers.
● Since most social
media platforms
do not have a tool
to measure the
effectiveness of
their platforms for
advertisements
which is why
corporations will
choose to
advertise on
traditional
channels.
● Twitter can
monetize its own
data by using
Bluefin and not
other firms such
 as Nielsen.

Conclusion

Utilizing Bluefin’s machine learning capabilities to strengthen Twitter’s

marketing strategy is the best option for both Twitter and Bluefin. This is the
best option for Twitter because Bluefin can measure the effectiveness of Twitter
for advertisements. Since corporations spend less money on Twitter this process
will increase the amount of money corporations pay to Twitter for
advertisements because corporations will realize the amount of exposure they
are receiving for their advertisements. Also, Twitter will be able to monetize its
own data without help from external companies which would make Twitter
incur more expenses. Finally, this is the best option for Bluefin since this option
has the least amount of risks associated with it because not providing
exemplary service for a few Bluefin clients is reasonable when you have to
prioritize Twitter’s needs and wants since Twitter owns Bluefin.