Social Media Minute: Predicting Stocks via Tweets, Facebook Leaks Data

By Jason Harris (@harrisja) Oct 20, 2010

Social media moves so fast, it's hard to keep up. Here are the week's top stories in scan-friendly format:

Twitter Activity Said To Predict Stock Market
Privacy Watch: Facebook Apps Leak Data
Klout Adds Facebook To Influence Metrics
LinkedIn Enriches Profiles with Skills, Publications and More

Twitter Activity Said To Predict Stock Market

At Indiana University, researchers have devised a way to utilize sentiment on Twitter to predict changes in the Dow Jones industrial Average. By analyzing the attitudes and 'moods' on Twitter, researchers' algorithms can predict whether the DJIA will rise or fall two to six days after the tweet sentiment is measured.

Obviously more research is needed, however the research points to an interesting question: can real-time conversation in a public forum be used to measure upswings or downswings in stock market activity? According to the researchers, their success rate is at 87.6%.

Brand ambassadors will tell you that Twitter is a great tool for monitoring public opinion about a brand or product, but predicting stock price tendencies out of Twitter traffic seems a bit far fetched. Going forward, keep an eye on this space as deep analysis is routinely performed on Twitter and Facebook activity — along with conversation from across the "real time web".

Privacy Watch: Facebook Apps Leak Data

It seems every week Facebook has some sort of new story come out about data security and privacy. This week, the Wall Street Journal published a story saying that the millions of users of Facebook Apps and games, including the popular games from Zynga, have been routinely transmitting data to third parties.

The information transmitted includes a unique ID number that every Facebook user has. When cross-referenced, it's possible to harvest a Facebook user's name, address, date of birth and other information held in the Facebook profile. Facebook has reported a future fix for this ID leak but, but failed to give a date to when the fix might be in place.

So, should Facebook users stop playing Facebook games? Probably not. However, this is a good reminder to go back into your public profile and restrict any information you don't want any person on the web to see, including marketers. Facebook has tools to help you lock down your profile and these should be utilized by all Facebook users concerned with privacy.

Klout Adds Facebook To Influence Metrics

There are a few ways to measure how influential an individual or brand is on the new 'social web'. One can simply look at how many Twitter friends or Facebook followers a person has, for example. However, how are the messages sent out by that person or brand measured in the social channels in which they participate?

This is where Klout comes into play. The website measures influence by studying tweets, retweets and other measures on Twitter. However, recently, the company is now analyzing Facebook activity as well. So now, Klout provides a more holistic picture into someone's influence and pull on the social web.

To enable Klout to measure an individual user, that Facebook user must link their account with the Klout service. The new feature will appeal to social web users who might be more active on Facebook than on Twitter or who want to get a more accurate picture of activity on these two social networks. Please note, Klout only measures your personal Facebook account — pages for businesses/organizations are not usable in Klout's system.