Twitter and Microsoft in Talks Over "Firehose Data Stream Licensing Deal

Microsoft is reportedly in talks with the microblogging site Twitter to strike an agreement for Twitter's "firehose" data stream licensing deal for its Bing search service.The outcome could mean a lot to both Twitter and Bing. Without a deal, the San Francisco microblogging service would be without two major paid distribution outlets for its full […]

Microsoft is reportedly in talks with the microblogging site Twitter to strike an agreement for Twitter's "firehose" data stream licensing deal for its Bing search service.

The outcome could mean a lot to both Twitter and Bing. Without a deal, the San Francisco microblogging service would be without two major paid distribution outlets for its full live stream of user tweets, a significant source of its revenue to date.

Meanwhile, Microsoft's Bing -- which is waging an expensive battle in a search arena dominated by Google -- has the opportunity to be the only major search player with extensive access to social data from both Facebook and Twitter.

AllThingsD.com reports via unnamed sources that the while two companies are chatting about renewing the deal, it adds that Microsoft and Twitter still have a number of issues under dispute, "including the price and term of the data licensing, the way the tweets and advertising linked to it will be presented on Bing, the cut of that advertising and even how much traffic Bing pushes back to Twitter." Microsoft would also like to get more control over the user interface and perhaps even a longer agreement than what has been offered by Twitter.

Earlier this month, after Twitter cut off the feed, Google took its entire real-time search product offline due to Google not able to renew an agreement with Twitter. Twitter, sources said, didn't expect Google to actually walk away. Google's distribution is significant to Twitter (and obviously much larger than Bing's), and tens of millions in revenue actually matter quite a bit to Twitter's bottom line.

That relationship has also been become more tense as a result of the recent splashy launch of Google's social network, Google+. The new social network is shaping up to be a competitor to Twitter -- and a source of real-time data itself.

Indeed, sources said the two sides remain in contact over some renewal of the deal, despite the closing of the Twitter spigot.

But just how valuable is real time search to Microsoft? Real-time search "could be valuable, especially with a really good implementation, in terms of user experience and also revenue," said one source. "But it has definitely not crossed that threshold for anyone yet."

Twitter, meanwhile, noted that it still has fire hose deals with Yahoo, NTT Docomo and Yahoo Japan, as well as "dozens of other smaller developers." That said, not all of them have had to pay.

[Via: AllThingsD]