Here are your social media business updates for Friday:
Study Uses Twitter Trending as Market Predictor: Forbes contributor Jeff Bercovici reports that shortly on the heels of Twitter’s 6th birthday, a study published by the University of California at Riverside asserts a direct correlation between Twitter trends and stock activity. One of the questions that has dogged the still-private company is “What exactly can its product be used for?” Twitter was long seen as a social media hub, and possible news aggregator and brand-promotion tool — and as of this week it has 140 million users generating a collective 340 million posts per day. A UC Riverside research team led by Vagelis Hristidis, associate professor of computer science and engineering, set out to chart whether chatter trending about publicly traded companies can be employed to predict their stock activity.
Hristidis summarized the findings of the study curtly, “We found there was some potential to do that.” The research team zeroed in on a variable they dubbed “connected components” — basically the string of conversational topics trending around a company on any given day. The more connected components around a given security, the higher the trading volume. There also was a clear positive correlation between the amount of connected components and share price — more chatter, more gains.
The team worked their algorithm around a trading model that distinctly outperformed the Dow Jones Industrial Average, with their basic Twitter program reporting only 2.2% losses against the Dow’s 4.2%.
Google+ Growing Popular with Mobile App Developers: In a recent survey of mobile app developers, an overwhelming 66% of them expressed a positive evaluation of Google‘s (NASDAQ:GOOG) fledgling social network — expressing particular appreciation for Google+’s potential to integrate with the constellation of preexisting Google products. NetworkWorld reports that app developers are showing an increased anticipation that G+ will network with YouTube, Android and Google’s stalwart search and advertising features. Internal services integration would provide G+ with a distinct advantage that social media titan Facebook currently lacks.
Adam Patterson is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities. For more on social media, check out our previous Trending Social Media stories.