Twitter gets into business; plans to sell keywords, ‘promoted’ tweets

Twitter, a social network based on short 140-character updates, has seen incredible growth with more than 22 million users visiting the site every month and millions more using third-party applications to interact with the service. From a small startup Twitter became a synonymous name in the social networking arena. But It has been heard that Twitter founders brainstorming how they can built a profitable business model with this free service.

Now we need to really suspect that they have something in stock. Twitter is taking a small step to becoming a real business. Twitter carefully rolling out advertising. Ads will be limited to searches and those that don’t generate favorable response pulled back. It’s a sensible first step in Twitter’s need to generate revenue without annoying users. But more are needed.

While Twitter’s users send about 50 million messages a day, and the figure is growing quickly, it has been unclear how the company will support itself. Yes, the company raised a reported $100 million in September. And agreements with Microsoft and Google later in the year added perhaps a quarter as much. But the firm needs regular and larger injections of cash to sustain growth and fight off rivals like Facebook as reported by Reuters

Promotional Tweets and Keywords

In the first phase, Twitter will start with promotional tweets as the top most tweets on the search results page which will be search.Twitter.com. Similar to search advertising, marketers will be required to purchase keywords for which they want to showcase their promotional messages.

At First the ads will only show up for less than 10% of users. Over time, this figure will rise, but it gives time for customers to get used to the idea of sponsored tweets. Second, ads that users don’t forward or mark as favorites will be deleted. This ensures customers will only find promotions deemed to be useful or at least minimally entertaining. And advertisers will know their ad dollars are being spent wisely.

That said, Twitter will eventually have to expand advertising beyond this experimental realm. Many of the service’s beneficiaries simply avoid the company’s site and use third-party software to sort and add context to tweets. These users are the company’s next step.

While the company has taken a good first step to make ads useful, the trade-offs between intrusive advertising and the need for revenue generation will probably become more acute over time. If Twitter wants to reach its goal of 1 billion users, it will need a substantial war chest. For that, the firm will need to generate dollars as effortlessly as starlets and pop stars produce tweets.

Source : Reuters