Predicting economic activity through twitter.

• Position: Social Media - Brief article

The media called it "The Twitter Predictor," and some scoffed at the idea that, by analyzing activity on the social media tool, one could predict economic markets like the Dow Jones Industrial Average, but John Bollen, associate professor of informatics at Indiana University, Bloomington, received a valuable form of validation: a U.S. patent.

Bollen and Ph.D. student Huina Mao, coinventor of the mood tracking system that analyzes hundreds of millions of tweets each day, first gained attention after posting a research paper, "Twitter Mood Predicts the Stock Market," in 2010. After two days, Google had returned nearly 70,000 hits on the title, media picked up on the story, and, within a few months, hedge funds were offering to invest millions of dollars in their system.

"The past two years have seen tremendous growth in this industry, some of it possibly inspired by our work," Bollen declares.

The network tracking system calculates indicators of the public mood along a multitude of dimensions. The original work used six mood categories--tension, depression, anger, vigor, fatigue, and confusion--but those since have...