Hypo Venture Capital Headlines: Forget in-depth financial analysis- Now even Wall Street is turning to Twitter for clues on the stock market

http://hypoventurecapital-financialideas.com/2011/05/hypo-venture-capital-headlines-forget-in-depth-financial-analysis-now-even-wall-street-is-turning-to-twitter-for-clues-on-the-stock-market/

Twitter may have finally found a real way to make money.

For years, analysts have predicted that the real value of the social networking service doesn’t lie in serving advertising to users, but rather in serving up millions of points of real-time data to anyone who can wring useful intelligence out of it.

A new paper published by an Indiana University professor, combined with recent practices on Wall Street, suggest that Twitter may be a goldmine of valuable financial information.

Power to the people: A professor’s analysis of Tweets proved 87 per cent accurate in predicting stock prices

Data: Social services like Twitter may prove invaluable when it comes to real-time financial information

Johan Bollen, a professor of informatics at Indiana, co-authored a study that linked a computerized assessment of the ‘mood’ of millions of Twitter posts with stock marketperformance.

Mr Bollen’s analysis of Tweets was said to have an 87 per cent chance of successfully predicting stock prices within three or four days of online discussion of the company in question.

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To reach his conclusion, Mr Bollen analyzed a total of 9.6 million tweets over nine months in 2008, using two mood-tracking tools.

One program assessed whether a tweet about a particular company was positive or negative, while the other tried to drill down further and categorize tweets through six modifiers: calm, alert, sure, vital, kind and happy.