• The Register (UK) et al., Tuesday, April 13, 2010 12:33 PM

At long last, Twitter is unveiling its monetization strategy -- or, as The New York Times puts it, "how the company expects to turn its exponential growth into revenue."

And not a moment too soon, writes The Register. "Twitter desperately needs some revenue -- a couple of content-licensing deals [with Google and Microsoft] aren't going to pay the bills and the VC cash will, eventually, run out."

Enter the new ad program, which is named Promoted Tweets and will show up when Twitter users search for keywords that advertisers have bought, a la Google AdSense. Later, according to The Times, Twitter plans to show promoted posts in the stream of Twitter posts, based on how relevant they might be to a particular user.

Twitter itself describes the ads as "ordinary Tweets that businesses and organizations want to highlight to a wider group of users."

By next Tuesday, the microblogging leader plans to begin rolling out the ads to 2% to 10% of users. Brand partners at launch include Best Buy, Virgin America, Starbucks, and Bravo.

For now, "Twitter's ad-matching and pricing formula is a work in progress," notes The Wall Street Journal. "The company will start by charging marketers per thousand impressions of their ads ... Over time, it plans to move to a more complex model, charging based on how users interact with the messages."

Of critical important to marketers, the ads will be a way for companies to enter the conversation when, as The Times says, "it turns negative." (To date, select companies have created tools to measure sentiment on Twitter, but until now, businesses could do little with that information.)

More important to Twitter, however, is how users respond to the advertising.

Apart from a good 'ol fashioned user backlash, "If Promoted Tweets prove unpopular with users, rival application developers may offer products that filter them out," suggests The BBC.

Moreover, "Expectations are high for Twitter, which raised more than $135 million in venture funding at a $1-billion valuation last year," The Los Angeles Times. "The company has agonized over how best to commercialize the site without upsetting tens of millions of users."

Still, Twitter's massive adoption rates are such that some industry watchers don't believe the relative success or failure of Promoted Tweets can seal its fate.

As Alberto Nardelli, founder of Tweetminster, a site for tracking British politics on Twitter, tells The Financial Times: "I don't actually think that sponsored Tweets are by themselves a game-changer ... My feeling is that the move should be seen within the context of Twitter experimenting with various revenue-generating possibilities."

Read the whole story at The Register (UK) et al. »