Twitter tests waters with its first advertisements

April 14, 2010|Michael Liedtke and Barbara Ortutay, Associated Press

SAN FRANCISCO — Is Twitter the next Google, the next Pets.com, or something in between? It may have begun answering that question yesterday, with its first step into advertising.

The start-up is trying to make money without alienating the tens of millions of people who have gotten used to tweeting and following friends, celebrities, and others without commercial interruptions. Just as it has through most of its four-year existence, Twitter is treading cautiously.

The new ads, called “Promoted Tweets,’’ will pop up only on searches at Twitter’s website, and the messages will be limited to a small group of test marketers including Virgin America, Best Buy Co., Sony Pictures, and Starbucks Corp. Fewer than 10 percent of Twitter’s users were expected to see the ads yesterday, but the messages should start appearing on all relevant searches within the next few days.

The move heralds a turning point for Twitter, which has held off on selling ads even as its widening audience turned it into an obvious marketing magnet and investors poured $155 million into the San Francisco company.

The last cash infusion seven months ago valued privately held Twitter at about $1 billion, even though its only significant revenue had come from giving Google Inc. and Microsoft Corp. better access to its service.

There’s a twist to the way Twitter is using its search engine as an advertising springboard. Instead of displaying commercial messages on the margins of the search results like Google, Twitter will blend them with the rest of the tweets and label them as promotions. The ads will be confined to Twitter’s standard 140-character limit so they can be passed along, or “retweeted,’’ to other users. Twitter plans to pull Promoted Tweets that aren’t attracting attention.

Twitter says it distributes about 50 million tweets per day.

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