Twitter Reveals Business Plan: Promoted Tweets

Finally, Twitter is unveiling its business plan, which is having ads designed to profit from the 55 million Tweets posted daily and the value of searching them.


The program will be called Promoted Tweets, and these 140 character ads will appear with relevant searches. Advertisers like Starbucks , Best Buy and Virgin America, are already on board for these keyword search ads, similar to Google's search model.

The idea is that advertisers will pay so their Tweets are prominent, appearing at the top of a list of search results, and not lost in the shuffle of comments about a brand or company. Initially, the ads will just appear atop a list of search results, but they'll eventually be integrated into the list of results, with results more relevant to the search terms higher on the list.

Twitter is anxious not to annoy its tens of millions of unique users (it doesn't reveal numbers). At first, it'll only posting ads in search results, rather than the users news feed, a model that is expected down the line. And the microblogging service, which has been testing promoted Tweets, will roll out the ad model slowly.

The idea is that people will "retweet" relevant or interesting ads -- like an offer for a deal on a Virgin flight or a limited offer at Starbucks -- and the message will become viral. In fact, Twitter is investigating pricing ads based on how much a "Promoted Tweet" is passed around -- its "resonance."

Hardly the first with this idea, Twitter is revealing this model a day after serial entrepreneur Bill Gross launched a very similar business, called TweetUp.

TweetUp allows companies to buy keywords to promote their Tweets. These paid Tweets will be delivered to applications built on top of the Twitter platform like TwitterFeed, Twidroid and Seesmic.

The fact that Twitter and an outside developer are pursuing very similar models raises issues. And it points to the conflict between Twitter and the 70,000 or so applications built by outside developers, who are also trying to profit from Twitter's model and reach.

I'll be interviewing Twitter COO Dick Costollo about Twitter's new model in “Closing Bell.” And Wednesday, I'll be reporting from Twitter's first-ever developers conference, "Chirp."

Questions? Comments?