May 25, 2011 8:42 pm

Twitter acquires UK’s TweetDeck for $40m

Twitter has acquired TweetDeck, a UK-based company whose application helps users of the microblogging site organise social media messages, giving Twitter more direct control of its most energetic, sophisticated user base.

Twitter paid $40m in cash and stock for TweetDeck, according to people involved in the deal, making it the winner in a bidding war with rival UberMedia. Both companies were vying for the opportunity to maximise advertising and social networking opportunities among TweetDeck’s prolific users, which include consumer businesses, marketers, and news organisations.

More than 20m people have downloaded TweetDeck since it was launched three years ago, and posts from the service account for 10 per cent of messages on Twitter. “The mainstream Twitter user base is well catered for by twitter.com and the official mobile clients,” said TweetDeck founder, Iain Dodsworth, in a blog post. “And by becoming part of the official platform, TweetDeck will now fill that role for brands, influencers, the highly active and anyone that just needs more power.”

The acquisition is the latest in a series of attempts by Twitter to take control of users cultivated by third-party developers. The company acquired Tweetie, a popular iPhone app, last spring, and partnered with TwitPic, which allows users to post photos to Twitter.

One person close to Twitter said the company will focus this year on continuing to expand its user base, rather than monetisation. Nonetheless, TweetDeck offers the company an opportunity to make money from its service in the future. Though TweetDeck does not generate substantial revenue, some of its more fanatical users could be willing to pay for enhanced services. TweetDeck investors say this was a point that eluded Twitter until other companies started showing interest.

UberMedia may have highlighted the strategic value and probably made them realise what they might have been missing, said one TweetDeck investor.

Brent Hoberman, one of the UK entrepreneurs behind ProFounders Capital, a fund investing in TweetDeck, added: “A few years ago it wasn’t as clear that Twitter was so controlling of its ecosystem.”

The acquisition is a victory for east London’s “Silicon Roundabout” cluster of internet start-ups as they try to gain recognition.

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