Near and close (Facebook IPO)

I read some interesting posts on HN that argue the advertising merits of social media. With the Facebook IPO just past us, there has been a bevy of posts and articles on how social media advertising did not work for some particular organization. It isn't only Facebook this time. At least one poster reports disappointing results from Twitter's paid tweets. IIRC, Twitter's advertising platform is still technically in "beta" at this point. In any case, despite the frenzy over social media as the magic lamp for advertising, there are at least some who realize that it isn't a turnkey solution. Companies hire social media experts to get out the tweets, retweets, and likes. Newcomers come with a budget and a lot of faith in the seemingly magically benefits of viral channels. Alas, the viral coefficient has to be maintained. Moreover, as demonstrated in some of those posts, viral promotion does not guarantee sales.

Datamining Sentiment from News Text

In an earlier post, I mentioned different companies using social media to gather information for stock market trades. The larger area of developing predictive analytics and datamining of news article text has several interesting players: Thomas Reuters [PDF], Dow Jones (RavenPack), Predictive Signal, and MarketPsych. Predictive Signal claims 10.4% positive returns (not annualized) over a nearly 3 month period (May to Aug 2011) versus an S&P 500 decline of 9.9%. MarketPsych cites a 25+% better returns than the S&P 500 with a third of the volatility from September 2008 to December 2010. In the latter, they actually traded over that 2 year period using their proprietary signals (MarketPsy Long-Short Fund LP).