What does Twitter's $150m Magic Pony acquisition tells us about the future of social media?

The company is future-proofing as it continues to struggle to attract new users...

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General view of social media apps Facebook, Twitter and Instagram displayed on an iPhone 5 | Image: Edward Smith / EMPICS Entertainment

Twitter has moved to beef-up its AI and VR arms with the purchase of Magic Pony Technology - a UK-based company which it has acquired for a reported $150m.

Its technology uses 'neutral networks' to improve the quality of photos and videos - this means that the technology is trained to think like a human. The immediate application is that it can take grainy images and enhance them by creating different versions of the base image with can be fused into a clearer amalgamated image, like below:

It works in a way that is similar to how the human eye sees objects from different angles and processes them into one image.

This technology is also likely to be used to develop virtual reality and augmented reality features and experiences.

It also exploits machine learning - technology that can learn by itself as it gathers data.

"Magic Pony’s machine learning technology will help us build strength into our deep learning teams with world-class talent, so Twitter can continue to be the best place to see what’s happening and why it matters, first. We value deep learning research to help make our world better, and we will keep doing our part to share our work and learnings with the community," Jack Dorsey, Twitter CEO and co-founder said.

"Machine learning is increasingly at the core of everything we build at Twitter," he added.

This is the third machine learning startup that Twitter has acquired, following the purchase of Whetlab and Madbits last year. The first assists with the building of new machine learning systems, while the latter assists with image searching, tagging, and management.

Magic Pony has 20 patents which will now be owned by Twitter.

This has been read as a demonstration of Twitter's commitment to make video central to the future of its business.

The micro-blogging site continues to lose ground to Instagram and Snapchat - Snapchat recently passed the app in daily active users.

Its user growth has stalled, it took over Vine and Periscope - two popular apps that it has worked to integrate into the main Twitter experience. Vine has struggled to stay relevant while users can upload video to Instagram, or directly to Facebook or Twitter - while Periscope faces competition from Facebook's live streaming service.

Twitter is still a global force but is often referred to as a bubble - while a purchase like this shows that it has some ambitious plans to develop new experiences, it will be a real struggle for the platform to make its next leap forward...