Twitter Advertising Business Model Coming Soon

March 3, 2010

1:00 pm

Twitter’s monetization plans have been the topic of a number of conversations and debates over the years as this start-up has grown in prominence. It looks like those days are close to over as Twitter has revealed plans to create an advertising platform similar to that of Google’s Adsense and Adwords programs. According to a report by All Things D the Twitter ad platform will copy Google’s:

  • Ads will be tied to Twitter searches, in the same way that Google’s original ads were. So a search for, say, “laptop,” may generate an ad for Dell. The ads will only show up in search results, which means users who don’t search for something won’t see them in their regular Twitter streams.
  • The ads will use the Twitter format–140 or fewer characters–and will be distributed via the third-party software and services that use Twitter’s API. The services will have the option of displaying the ads, and Twitter will share revenue with those that do.
  • Twitter will work with ad agencies and buyers to seed the program, but plans on moving to a self-serve model like Google’s, down the road.

The advertising platform seems straight forward and simple. Twitter has not indicated a launch date for this advertising platform but says it will be rolling it out in “tests” first. A Google-like ad platform further positions Twitter as a key acquisition target for Google who is probably salivating at the sound of coins trickling in like a stream of tweets. Or maybe not? Google may be thinking that Google Buzz could act as a wrapper to all social activity streams thus the purchase of Twitter might not be necessary.

What do you think about the proposed Twitter business model?

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Frank Gruber is the cofounder, CEO and Executive Editor of Tech.Co (formerly Tech Cocktail). He is the author of the book, Startup Mixology, Tech Cocktail’s Guide to Building, Growing, and Celebrating Startup Success. He is also a startup advisor and investor to startups. Find Frank Gruber online and follow him on Twitter at @FrankGruber.

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