I don't get it. Are startups now just a new resume? How are BackType users supposed to react to this? How are users supposed to trust other API startups if they can just get the rug pulled out from them like this?

I'm happy for the team, but is there not any way they could have transitioned the project to other developers and still joined twitter fulltime?

Start-ups are businesses. They make money for their investors and founders. Handing off the code sounds like hippie poppycock to me. I suppose they can do it if they want to, but they don't have to.

Sure, but it reinforces the notion that you can't put too much faith in a startup sticking it out.

Normally that's because people think they might go bust and you'll lose that thing you got used to having. It also applies to when a startup gets acquired and the service is then shut down. Folks who've been stung by this once might think twice before using/buying stuff from a small company in future.

So far, I haven't heard a PEEP from anyone paying backtype. If what you say is true, where is all the press about how horrible this is for their customers?

We're using the BackType API and it is frustrating that they're discontinuing the API. They've also just announced the discontinuation of the service with no word about timescales that this entails. For all we know they could discontinue it tomorrow.

Unfortunately there doesn't seem to be anyone offering a real alternative to the BackType APIs. There is Topsy which doesn't seem to have as much data coverage. Other alternatives require handling live streams of considerably more data.

I'm making a general point about why people don't always like to use products from startups and how this particular case reinforces their views. I wasn't suggesting that backtype had paying customers.

Also, a lack of press coverage does not mean there aren't unhappy users out there.

Seems like it's a valuable asset and they are wasting it. If twitter just cares about the team, why not sell the product to another team who can keep building and extending it.

Similar thing happened when facebook bought the mac developer Sofa. They sold off their products to another developer.

[ YC08 ]

BackType has raised a total of $1.32m according to http://www.crunchbase.com/company/backtype

No speculation as to the size of the acquisition, but I guess anything between $10-100m is possible, which would give YC a return of about 3% (6% adjusted down to 70% twice) of that, or somewhere between $300k and $3m?

"YCombinator: turning $15k into $300k in 3 years"

Not bad.

Edit: This is based on the idea that BackType is successful, and had other options (which may not be the case, since their QuantCase/Compete graph is going down)... if they were about to go bust, the price could be considerably lower... but if they were doing well, I imagine investors would have blocked a sale lower than $10m.

Two thoughts:

Quantcast/Compete is almost no relationship to reality when you are talking about b2b startups or startups with sub-10M/month uniques. They are wrong in magnitude and growth trends as often as they are right, in my experience.

Also, if an investor DID block a sale, that fact would come up any time they were competing to fund future YC companies, so it probably wouldn't be worth it for an investor to do that... Yet another value that YC provides.

I think it is more sub $10M. Their product will be discontinued, so it appears they are buying the team. Bactype looks like a company with a handful of employees so you probably want to count $1M/engineer or maybe $1.2M.

I've heard $1-3M per engineer is common math at BigCo (from the horse's mouth).

In this case, the BackType engineers are pretty damn epic, so I'd wager it's towards middle/high side of the range.

I've been told by people close to the company that it was in the $50-100 million range. Given how aggressive the Backtype guys are, this doesn't shock me at all.

$100 mil split three ways is quite a prize.

Interesting. Will we see a number if it was $50-100M in stock/cash - at what point do companies need to file with the SEC (or does Twitter not need to file since its still private?) I'm assuming it was at least partially stock, as Backtype investor Paige Craig's tweet suggests (http://twitter.com/#!/paigecraig/status/88304617397563392).

I assumed it was sub 10M. If in fact they sold it for north of 30M, I would be really impressed. This is a team of 3, I believe. Nice work, BT.

it's 4 people: http://twitter.com/backtype/team/members

It would be very hard to believe that there was much cash in the deal. The Wall Street Journal is reporting twitter is raising another round that will value them at $7 Billion (see http://online.wsj.com/article/SB1000142405270230480310457642... ) If you value twitter stock at $7B then perhaps they received $50M in stock,

And just 34 days ago AdGrok was joining the flock: http://news.ycombinator.com/item?id=2603541

Guess YC/Twitter relationship was only at the very beginning when Avi Bryant helped pg adopt @paulg: http://twitter.com/#!/avibryant/status/22303889283

Old readwriteweb article

"Secrets of BackType's Data Engineers - How do three guys with only seed funding process 100 million msgs a day?"

http://www.readwriteweb.com/hack/2011/01/secrets-of-backtype... HN discussion http://news.ycombinator.com/item?id=2097926

I am not a Clojure fan, but I found BackType engineer Nathan Marz's fusion of Datalog, Clojure and Hadoop to create Cascalog very impressive, and was looking forward to Storm.

Given Twitter's history with Open Source, I'm guessing we'll still see Storm.

I enjoyed reading about Nathan's work as well. He was the only team member I knew of.

A) Congratulations to the BackType team! I wonder if they're the first Clojure-heavy startup to be acquired. It will be interesting to see what happens to their technology stack after a couple of years.

B) Does this impact the open-sourcing of Storm?

Flightcaster is even earlier. FC might have been the first.

Oh you're right - I totally forgot about Flightcaster's acquisition!

Velocitude got acquired too by Akamai.

Storm will be rewritten in scala

Do you really know that or are your just guessing?

We're going to continue using Clojure just like before.

Your blog has been one of my favorite reads for a while now. Please keep it up!

I wish that when a headline announced "Big company acquires little startup you've never heard of" that it would be accompanied by some explanation of what the little startup actually does, and why it is interesting.

You would typically know about it if you're into social media analytics and metrics and its effects on advertising and so on.

Their technology stack is very cool. The amount of data it needs to process is staggering. And this whole field is relatively new so there are tons of potential in it.

Yes but even the fairly niche demographic of HN extends to those with interests outside of social analytics.

The interest here (for most people I assume) is the YC funding they got in 08. (Or "O8" as it seems to be written in the headline.)

Yeah agreed. And their site doesn't seem to say anything either, other than they've been acquired by Twitter.

Looking at Google search results it appears to be social analytics. I guess they spit out metrics on brand mentions, retweets, compute scores or ranks on "buzz", and probably do sentiment too. But I'm guessing wildly.

Congrats guys! I worked with Nathan, and he's a brilliant guy. Well deserved success.

"we will discontinue the BackType product and API services"

Besides Google Alerts, what alternatives are out there?

I was using some of BackType's API's myself. Now I'm taking a look at http://corp.topsy.com/developers/api/.

This kind of sucks, actually.

I wonder what affect this will have on the open sourcing of Storm.

I think you meant effect.

Black shirt acquired! Congrats guys!

If you're referring to the "I made something people want," is it true? It sounds like they really want the engineers, which they didn't make (their parents did, I guess they deserve the shirt then?).

Yes, I'm joking. Congrats to the team! They should wear their shirts proudly!

Congrats to the guys of BackType.

I have been very tempted to apply to their internship during the winter.

Looks like they shut their free api down around noon today. Not even a tweet. Boo.

Congrats guys. Well deserved.

Congratulations to BackType!

and yet no profit has been had...good job twitter, good job

Companies rarely buy other companies for their profits. Most of the time it's a strategic move e.g. Twitter purchasing Tweetdeck to protect itself from aggressive moves by UberMedia

It baffles me how, with the number of investors involved and the huge amount of money on the line, Twitter is making any strategic move other than "how do we get profitable"