July 22, 2014

Twitter’s Data Mining Profits Show Lesser-Known Social Media Risk

In an interview for this month’s issue of Risk Management magazine, lawyer and social media specialist Adam Cohen cautioned businesses that the risks of social networking sites extend beyond explosive posting faux pas.

“In most cases, corporations don’t realize that what they put on these social media services is all subject to the privacy policies and terms and conditions of the services,” said the eDiscovery expert and author of Social Media: Legal Risk and Corporate Policy. “Those provide a shocking amount of access by the social media services where they may take your data.”

As Twitter prepares for its much-anticipated IPO, the social media giant has released a torrent of information on its financial standing and practices. One of the most important tidbits for users concerns the site’s lesser-known side-business: data mining. In the first half of 2013, Twitter made $32 million by selling its data—namely, tweets—to other companies, a 53% increase from the year before.

So far this year, the company has raked in $47.5 million from selling user data to companies that analyze the social media posts for insights into news events and trends. Because of its real-time nature, Twitter is the primary contributor to data mining, though other social networks are frequently used in professional analysis.

This analysis is then sold to businesses for a slew of uses. ”The types of ways that businesses are using Twitter data has gone deeper and deeper,” Chris Moody, the CEO of original Twitter data mining company Gnip, told Time. “We’re seeing it in supply chain and inventory management. It’s not just consumer brands that are engaging on Twitter.”The United Nations uses Twitter algorithms to pinpoint areas of social unrest. Burger chain Five Guys used “social intelligence technology” from New Brand Analytics to monitor quality in restaurants across the country and evaluate the appeal of a new fry size offering. Wall Street subscribers to one service, Dataminr, got a leg up on the S&P Index drop following the Navy Yard shooting. Five minutes before the news broke, users received an alert to take action after the company’s algorithms picked up on eyewitness reports and deduced from their timing, influence, and location that something urgent was taking place.

Clearly, there’s money to be made on both sides. According to the Wall Street Journal, the “social listening” business is booming, partially funded by millions of dollars in venture capital. Research firm IDC estimates that the entire “big data” market has grown seven times as quickly as the information technology sector as a whole, and may be valued at $16.9 billion in two years.

Data is mined for a variety of purposes – ones your company may even want to explore – but while there are benefits to the ends, the means translate into cyber exposures of which you may never know the details or depth. While the reputational risk of social media garners a lot of the attention – and rightfully so – there are increasingly tremendous exposures that lay in the forms just to sign up. With Twitter going public, there will only be further incentive to maximize revenue by selling user data, and more reason to approach corporate social media with caution.

Risk Management Magazine and Risk Management Monitor. Copyright 2014 Risk and Insurance Management Society, Inc. All rights reserved.

About the Author

Associate Editor

Hilary Tuttle is the associate editor of the Risk Management Monitor and Risk Management magazine.


Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.