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Infonic and Lexalytics have announced the merger of their text analytics businesses (press release, PDF) to create Lexalytics Limited. While not as well known as the usual suspects in social media analysis, these companies are growing behind the scenes, supplying the technology for automated sentiment analysis and more.

From the press release, Thomson Reuters and Dow Jones Insight use Infonic for sentiment analysis; ScoutLabs, Cisco, Smartbrief and BurrellesLuce use Lexalytics software. Other back-end technology deals are in the works. Based on a recent conversation with Lexalytics for their entry in the Guide to Social Media Analysis, they're also developing custom monitoring and analysis platforms for service providers (though not necessarily the ones listed above).

The technology behind the curtain
Lexalytics is focused on licensing their core text analytics technologies to software developers and building social media analysis platforms for vendors. The software licensing model will make text analytics—automated sentiment analysis, for example—available in a wider range of tools by lowering the barrier to entry for their developers. The custom software development model, meanwhile, will help service providers without a strong software development capability to match the features of platforms from more technology-focused companies.

For clients, this means more and better tools will be available. For vendors, it suggests some questions about technology strategy, which I'll open up in another post.

Monitor110 is over. The company web site displays the company's statement on the decision to cease operations and shut down the company in the wake of its failure to arrange additional funding.

Clients, employees, and investors:

I regret to inform you that, effective July 15, Monitor110 has decided to cease operations and shut down the business...

Regards,
W. Brennan Carley, CEO

See the full statement on the company site.

Interesting space, little information
In the process of writing the second edition of the Guide to Social Media Analysis, I've talked to several companies who are mining media content—social and otherwise—for investment purposes. I've found almost as many strategies and analytical approaches as companies, so it's an interesting specialty.

Several competitors I talked to thought that M110 either wasn't selling their services or wasn't finding success in the market. Nobody likes to talk about their revenue, so I never know what to believe absent win announcements or customer references. In the financial space, that's especially sensitive, so there's no real information. I'm going to work on that.

Brown pastures?
Some blog comments (discussion on paidContent, SAI) have made the point that, if it really worked so well, M110 would have started their own hedge fund. Given some of the backgrounds at M110, that's an interesting point and a possible outcome. The company's announcement doesn't mention anything about liquidating assets, but I assume that they're thinking about how to extract the value from the development work they've done.

M110 isn't the first company to abandon the financial services market. Others have started with similar goals, only to switch focus to the broader corporate marketing and communications market. M110's failure suggests that the others may have made the right decision. I am, however, hearing from competitors who contrast M110's trial customers with their own paying customers. It's too soon to declare the financial market dead.

Going deeper
At the moment, I'm closing in on the completion of the second edition of the Guide, which should be out by the end of the month. Now, there's one less company to include, but others focused on financial applications are included.

Once the Guide is completed, I plan to take a closer look at the information arbitrage specialty. As usual, even the companies in the space tend not to realize who else is in their market, so this should be fun.

Related posts:

• Financial Week on Info-Arbitrage 28 Apr 2008
  
• Jodange mines sentiment for investors 29 Jan 2008
  
• Trading on social media 12 Dec 2007
  
• Yahoo Finance adds sentiment analysis 13 Sep 2007

TNS and GfK have announced details of their planned merger of equals to form GfK-TNS plc. The resulting company would have its headquarters in London and its primary listing on the London Stock Exchange. In the wake of the announcement, WPP is expected to make a third attempt to acquire TNS.

Other letters of the alphabet were unavailable for comment.

J.D. Power and Associates, a business unit of The McGraw-Hill Companies (NYSE:MHP) announced the acquisition of Umbria, Inc. this morning.

So much of the early interest in social media is based on defensive monitoring of customer complaints online. It's interesting to see Umbria's capabilities explicitly linked to J.D. Power's "voice of the customer-based studies on quality and customer satisfaction."

Just nine days after their acquisition of Compete, Inc., TNS (LON:TNS) announced the consolidation of its North American research units into the newly created TNS Media (via MediaWeek), with Dean DeBiase (formerly Chairman and CEO of Fathom Online) as CEO.

TNS Media combines four types of research:

• Ad tracking and marketing analytics (TNS Media Intelligence)

• Internet and broadcast audience measurement (TNS Media Research)

• Social media analysis (Cymfony)

• Panel-based web analytics (Compete)

The comparison with Nielsen is obvious (and getting more interesting). Is there anyone else who combines social media analysis, web metrics and traditional media research?

Taylor Nelson Sofres (LON:TNS) announced the acquisition of Compete, Inc. today (press release, via Marshall Sponder). Today's announcement, combined with last year's acquisition of Cymfony, puts TNS on the short list of companies that offer both social media analysis and panel-based online audience measurement.

Since its consolidation of BuzzMetrics and NetRatings into Nielsen Online, The Nielsen Company has made a point of demonstrating the breadth of its media and market measurement capabilities. It's going to be interesting to see the TNS version of combining different types of research. Today's announcement gives just a hint of how the company plans to combine online and offline measurement data:

TNS will apply Compete’s ability to profile, measure and segment the online behaviour of consumers to its own 6th dimension access panels. This will start in the US, where TNS has a fully managed access panel of more than one million people and will then be extended across its network. This will give TNS an unmatched ability to provide insight based on online and offline behaviour and on consumer attitudes.

Note that Compete and Cymfony are located a few minutes apart in the Boston area, which should make collaboration/integration meetings easier and more frequent.

Count on DEMO to include new companies to put on the radar. Jodange is a startup text analytics company focusing on mining financial documents and expert sources and understanding the relationship between sentiment and market prices. Of course, we already know the ROI of good predictions in financial markets.

Top of Mind is the company's service for analyzing "hundreds of thousands of documents tracking the Fortune 1000 and S&P 500, including everything from annual financial reports to transcripts of quarterly calls, CEO presentations, analyst reports and financial blogs."

The overlay charts with both sentiment and price trends suggest that Top of Mind will be useful in identifying which sources actually correlate to price moves. In the financial context, that's a pretty good definition of influence—correlation is as good as causation if it's consistent.

Jodange competes indirectly with Collective Intellect and Monitor110, but their approach is different. Jodange is focused on sentiment in carefully selected sources, while the others are looking for facts not widely known. I assume some interesting A/B tests will take place to determine the relative value of each approach; I also assume the results of those test will be quite confidential.

Looking forward to the video from DEMO tomorrow. For now, the detail is on the web site and in the press release, although CTOs in the room may be interested in the research papers on their downloads page.

Tags: jodange DEMO

Let's play a round of John Moore's Would you miss... game. Unfortunately, this one's not hypothetical. Clothing retailer Talbots (NYSE: TLB) announced today that they're closing their Kids and Mens stores. They've looked at the numbers and talked with the financial analysts. I wonder if they asked customers? My family, for one, is going to miss them when they're gone.

Talbots Mens was an interesting idea that I wanted to like, and it's convenient to browse while my wife is in the women's store. I like some of the clothing, but too often, it worked better on the hanger than on me. So I'll miss the Men's store, but not that much.

Talbots Kids, though, is a real loss. They've been a consistent supplier since before my son could sit up—those sweats were so *cute* (and comfy)! Now he's just about to move from the little boys to the boys section, and we're not ready to give up our best source.

It's easy to summarize why we like TK's clothing:

• It's attractive. Cute on the little kids, appropriately good-looking in the larger sizes. Makes me want them in the big sizes.

• It's comfortable. Makes him that much more huggable—not that he needs any help. :-)

• It's durable. Especially when he was a baby, everything looked and felt almost new when he outgrew it.

• It's well-made, or so it seems to me.

Are there other kids' clothing stores? Sure. But Talbots Kids has been a reliable place to find the clothing we need and styles we like. Department stores are just too much effort, and the other kids stores don't match our tastes consistently.

I don't know if Talbots management looked up from their spreadsheets to talk with customers, but I wish they would. They can close the Mens store without affecting me, but if they close Kids, we won't be in the adjacent women's store so much, either. And we're going to have a tougher task at back-to-school time.

The stock market didn't like the announcement, either. Want to reconsider?

(Photo from Talbots.com.)

Update: I sent a note mentioning this post to Talbots PR. I got a personal note back from a Senior Manager in Corporate Customer Service, incorporating some approved language about the closures but avoiding the feel of a form letter. It doesn't change anything, but give 'em credit for responding to me personally.

Meanwhile, the first box of clothing in the next two sizes showed up today.

Tags: wouldyoumiss Talbots

Some forms of ROI are inherently easier to track. While so many focus on the marketing & communications uses of social media, two companies are putting social media analysis techniques to work for institutional investors. What they do is simple: they look for reliable information online, before it shows up in mainstream media and moves the market. By going to the source, they can identify potential trading opportunities for their clients.

Buy on the rumor; sell on the news.

Collective Intellect and Monitor110 offer market intelligence services to the Wall Street crowd (CI also offers a version tailored to marketing and communications). The basics are familiar to anyone who's looked at social media monitoring services—they watch blogs and other online sources for interesting bits of information. The difference is their purpose: to find information that has the potential to move stock prices, before everyone else finds it.

Collective Intellect describes three different use cases:

1. Traders need to know everything going on with a stock in real time. They don't want a tap on the shoulder, a few minutes after a trade, to hear “didn’t you see that thing on the Internet about their product problem?”

   Traders deal with a lot of information, so there's an emphasis on filtering to find the best information and the best sources.

2. Portfolio managers and research analysts usually have more time to think, but they need a comprehensive view of activity associated with a stock, an event, a technology, an individual executive, or an industry.

3. Quants dig through the rich data available in social media for tradeable correlations. If there's predictive power in a social media metric, they'll find it—but don't expect them to share. They know how to make money with math secrets.

Monitor110 shares some enlightening examples of how this works. They have the blogger who beat the Wall Street analysts and the discussion forum that pointed out a company's problems. It's not all social media, though. I was particularly struck by the example of clinical trials results posted on a government site four hours before the company announcement.

If online market intelligence leads to a profitable trade, the ROI is easy to determine, without any arguments about how to translate outcomes to money.

For more on social media/2.0 technologies in the financial sector, check out Christopher Rollyson's notes on Web 2.0 and Enterprise 2.0 in Capital Markets (via David Teten).

Tags: social media analysis finance

I spend a lot of time talking with social media analysis companies about their products and services. I talk with other folks—clients, media—about what vendors are doing, too. Today, I thought I'd take a minute to share some of what's happening around here.

1. Round Two
   The RFI for the second edition of the Guide to Social Media Analysis is out. I'm tracking over 90 companies on five continents (welcome, Cape Town!), so the next release will be quite a bit larger than the first edition. To make the longer list manageable, I'm adding more quick-reference tables, too. (Later in the process, I'll go around for updates from the original 31 companies.)

   I suspect some of you are waiting for the second edition, so here's a deal for you: Buy the first edition now, and you'll get the update when it comes out in 2008. You'll be among the first to receive the second edition and avoid the likely price increase, too.

2. Adjusting boundaries
   After multiple inquiries, I've decided to take on limited vendor-side consulting. Client-side work on social media strategy and vendor selection are at the core of my work, but my previous stance ("no vendor consulting") was too limiting. I've begun accepting sponsored speaking opportunities, and I will accept engagements with vendors looking into partnership opportunities (especially international).

   I talk with a lot of companies, and I have almost no NDAs, but I do have strong personal ethics. A lot of people have trusted me with confidential information, and I have no intention of violating that trust. So, I will continue to refrain from consulting vendors on product and market strategy.

3. Web site update
   One of the comments on the Social Target web site was that some readers might react with a big "Huh?" So today, I added an introduction to social media analysis for people who find the site but don't follow the jargon.
   

And that's just the stuff I'm ready to talk about. ;-) It's been a busy, busy week year.