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IU Prof. Earns Patent For Twitter Stock Prediction Program

IU Professor Johan Bollen has received a patent for his program that predicts the stock market using Twitter activity.

An Indiana University professor who discovered a link between people’s moods on Twitter one day and changes in the stock market a few days later has been awarded a patent for his idea.

Informatics professor Johan Bollen and a graduate student, Huina Mao, formed a small business, Guidewave Consulting, shortly after their Twitter research hit the news wires.

Just a few months later, the duo sold a license for their idea to a British hedge fund, which almost immediately began monetizing the research.  The Indiana University Research and Technology Corp, or IURTC, bought a share of Bollen’s work and went about trying to patent it.  It not only received the patent, but gets a share of what Guidewave makes from its work.

Based on the words in thousands of Twitter feeds, the software predicts whether, about four days later, the Dow Jones Industrial Average will gain or lose value, purportedly with an accuracy rate of between 80 percent and 90 percent.

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