Meltwater Group, which has established itself as a leader in monitoring traditional media online, is now doubling down in the social media monitoring space. The company will announce later today that it has purchased social media monitoring startup BuzzGain for $4 million, including earnouts.
CEO Jorn Lyseggen tells us that the acquisition is indicative of the future direction of his nine-year-old firm. Currently, the company is bringing in about $100 million a year, primarily by selling its online media monitoring services. But Lyseggen says that Meltwater should be able to build an equivalent social media monitoring business within the next three to five years.
“We have 18,000 clients which entrust us to monitor traditional news,” he says. “It’s not a leap of faith that they’ll also convert to monitoring social media.”
Meltwater has offered its own social media monitoring service for the last eight months—and will now use BuzzGain to boost that offering. Lyseggen says Meltwater’s interest in BuzzGain is driven by the startup’s engineering team (The company’s client list is “limited,” he says). “We believe that having a strong engineering foundation is an absolute necessity (to be) competitive,” he says. All of BuzzGain’s 25 engineers will now join Meltwater.
The acquisition is Meltwater’s first since the company set up a corporate venture arm a year ago—and Lyseggen suggests there will be more ahead. “If we are able to recognize a technology or product with global potential we will consider (bringing) them into Meltwater,” he says. “We don’t believe we can out innovate the world.”
There’s been quite a bit of activity in the social media monitoring space lately, with Techrigy being sold to Alterian and several players, including Visible Technologies and Scout Labs raising significant rounds.