Lexalytics, whose text-analytics software can measure, among other things, whether a digital document is full of praise or insults, did not get off to a superlative start back in 2003.

To begin with, its investors almost closed the company down. Lexalytics got started when the venture funders behind a Woburn, MA-based content management startup called LightSpeed Software decided to consolidate that company on the West Coast. “They were going to close the East Coast operation, so I basically convinced them to give it to me to avoid the shutdown costs,” says Jeff Catlin, a former LightSpeed general manager who, together with a LightSpeed engineer named Mike Marshall, salvaged the Woburn operation, moved it to Amherst, MA, and renamed it Lexalytics.

But three months later, a wrinkle cropped up. Marshall, a UK citizen working in America on a green card, was deported. “They shipped him back, and we didn’t see each other for about three years,” recalls Catlin, Lexalytics’ CEO.

Marshall remained as chief technology officer, working remotely, and the company worked through its rough patch. Today, business is booming. In fact, the startup has outgrown its Amherst location—it’s already hired everyone it could recruit out of the UMass Amherst computer science department, Catlin says—and this month it opened a new headquarters office here in Boston.

The startup’s current momentum was a long time building, and was partly the result of some long-overdue luck, according to Catlin. Sentiment extraction, the ability to measure the emotional tone of a news story or a product review or a customer complaint, has long been one of Lexalytics’ specialties. But only in the last 18 months or so has demand for sentiment extraction software become red-hot, as companies in many industries have realized how the technology might help them with tasks like brand reputation monitoring and algorithmic investing.

“Looking back from a historical perspective, we were brilliant,” says Catlin. “We were the first vendor to do sentiment analysis, which landed us a number of big clients like Cisco, and we are now the recognized leader in that spot. I’d love to say it was really well thought-out and reasoned, but at the time we were just thinking, ‘What would be a cool feature to add?’”

Unlike Cambridge, MA-based Crimson Hexagon, Watertown, MA-based Cymfony, and a cluster of sentiment analysis startups in Seattle like Appature and Evri, Lexalytics doesn’t directly serve companies who want to know what people are saying about them on the Web. But the 20-employee startup does sell its software libraries to many of the firms that do this, including Cymfony and ScoutLabs. “A lot of those vendors use us under the hood to provide their sentiment analysis and entity extraction,” say Catlin.

Entity extraction is the process of tagging a digital document to identify key people, places, companies, products, e-mail addresses, themes, and messages. Once that’s done, Lexalytics’ software can also parse a document’s grammar, word order, and vocabulary to determine who’s speaking about whom, then score the emotional tone of each statement.

“Behind the scenes we have dictionaries of tonal phrases—typically, adjective-noun or adverb phrases—so that [the software] knows when it sees ‘horrible disaster’ or ‘wonderful day’ that those are sentiments, and who they belong to,” says Catlin.

Documents processed by Lexalytics’ software, called Salience, come back as XML files riddled with new metadata that companies can use to draw inferences or soup up their search results with related information. “You give us a document that’s a foot long, and we give you back one that’s three feet long,” says Catlin. “The best applications are with search vendors like FAST and Endeca who use the technology to make their solutions better. Google is great if you know what you are looking for, but if you have no idea what you are looking for, you need the data to tell you what’s going on. The metadata lets you start digging through that.”

Catlin gives a hypothetical example. “Say you want to know who is hot in the news today and who they are related to. It turns out Bill Gates is hot. You click on that and get the concept and the sentiments and the other people and companies that are mentioned around it, and may you find out that it’s about some energy company that he’s funding. You don’t have to have a great question at the start to find that out.”