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Twitter Acquires Analytics Firm

Twitter has bought Smallthought Systems, a Website analytics company whose technology will likely complement the micro-blogging site's moves into online advertising.

Twitter announced the acquisition Thursday, about two months after launching an advertising program called Promoted Tweets. The Smallthought staff will join Twitter's analytics team, which will work on integrating Smallthought's Trendly technology into the site's current tools.

Sites that publish advertising typically supply analytical software that advertisers can use to determine the effectiveness of their campaigns. Smallthought's technology provides the information by slicing and dicing data gathered through Google Analytics. The latter service provides Web site owners with data on how visitors are using their site.

Promoted Tweets mark Twitter's entry into online advertising. Announced in April, the program places Tweets promoted by advertisers at the top of search result pages. Like typical search advertising, the promotions are supposed to be connected to the topic covered in the user's search query.

Analyzing ad data on Twitter is likely to be complicated by the soaring number of Tweets. The mini-messages users broadcast to followers numbered nearly 2 billion in May, or about 2.7 million tweets per hour.

Promoted Tweets is currently in a trial phase with a select group of Twitter advertising partners: Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America. Other advertisers are expected to be added to the trial.

Twitter plans to eventually open Promoted Tweets to other advertisers and to partners, such as makers of Twitter clients.

Promoted Tweets differ from Google text ads in that they're integrated into Twitter's search results rather than segregated in an area reserved for ad copy. Only one Promoted Tweet is presented on each search results page and each is clearly labeled.