First, Twitter is continuing to collect under its direct control features that had been offered by third parties. The microblogging service recently acquired the popular Twitter client app Tweetdeck. It also recently added picture sharing to its feature set. These moves make it less necessary for Twitter users to go to third-party services to do what they want to do with, or on, Twitter.
Second, the move highlights the increasing value of measuring social influence. BackType's premier service was telling its customers how tweets about them were propagating through Twitter, and who the most influential people were on Twitter for a company or topic. This type of information is money-making for a social company like Twitter. Marketers want to know who in a social sphere, be it Twitter, Facebook, or another service, is important to them.
But apparently BackType's core technology--in particular its Storm feature, which is said to be able to process the "firehose" of Twitter data in real time--is the real reason Twitter bought the company. Terms of the deal were not disclosed. In the short term, BackType will "will discontinue the BackType product and API services," BackType's company blog said. We can expect that measurement and tracking services will re-emerge under Twitter's own brand.
The free Twitter analysis service "BackTweets" will stay up and running for current users, but won't be available for new users.
In light of the launch of what appears to be Google's first potentially successful social network, Google+, the acquisition of BackType makes a lot of sense. The battleground for social-network dominance is going to shift from the mad rush for users (where Facebook is winning) to a battle for influence. Other companies, such as Klout, are already in the influence-measuring business. By owning the best possible technology for measuring influence, a social-network company can more easily help its users become more influential. And access to that kind of influence is what marketers pay for. Assuming Twitter is able to gracefully absorb BackType's technology and engineers, the acquisition should pay Twitter back nicely.
See also: New Financing Values Twitter As High As $7 Billion (The Wall Street Journal).