Twitter Unveils Business Model

By April 13, 2010

After several years of rumors, Twitter has revealed its business model. Promoted Tweets, announced today on Twitter’s blog, is the first phase of the unveiling. Promoted Tweets will inject branded tweets into search and hasht

ag streams, one ad per stream. Like Google Ads, they will be context-based, increasing the chance of click through. They will be actionable like any other tweet – users can reply to them, or retweet.

Promoted Tweets are placed on top of the search results, as with Google’s sponsored ads.

The service is transparent enough, as the tweets say that they’re promoted. Advertising partners so far include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America.

Twitter’s Biz Stone writes that this is only the first phase of services the company will be rolling out in the monetization process. Twitter will gauge user response to Promoted Tweets before launching the next phases.

“Before we roll out more phases, we want to get a better understanding of the resonance of Promoted Tweets, user experience, and advertiser value,” Stone writes. “Once this is done, we plan to allow Promoted Tweets to be shown by Twitter clients and other ecosystem partners and to expand beyond Twitter search, including displaying relevant Promoted Tweets in your timelines in a way that is useful to you.”

Further announcements will be made at today’s AdAge Digital Conference and tomorrow’s Chirp.

Twitter rumors have been ramping up for the last few weeks, beginning with Twitter investor Fred Wilson intimation that Twitter would soon be starting to fill all the “holes” in the service that are currently filled by 3rd party services.

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