Twitter looks to turn a profit with paid tweets showing up in searches

SAN FRANCISCO -- Twitter announced Tuesday that it is introducing advertising by allowing companies to pay to have their messages show up first in searches on its site.

The debut of "Promoted Tweets" comes as Twitter increasingly faces questions about how it can turn its wide usage into profits.

The ads apparently won't bring in much money during the experimental phase of Twitter's commercial push. Virgin America, one of the advertisers that Twitter invited to test the concept, isn't paying for its first burst of promotional messages, according to Porter Gale, the airline's vice president of marketing.

"I would expect that it would turn into a paid model in the future," Gale said.

Twitter declined to comment when asked whether it's charging the test group of advertisers. Besides Virgin America, Twitter identified Best Buy Co., Sony Pictures and Starbucks Corp. among the other companies using Promoted Tweets.

The ads will be rolled out gradually, with fewer than 10 percent of Twitter's users likely to see them Tuesday. The company said the ads should be appearing in all relevant searches within the next few days.

Twitter has grown quickly in popularity since it started in 2006, with celebrities such as Oprah Winfrey and Ashton Kutcher "tweeting" messages of 140 characters or less alongside everyday users. About 69 million people worldwide used Twitter.com last month, up from roughly 4 million at the end of 2008, according to comScore Inc.

The site has been slow to capitalize on that success -- even though the investors who have backed the site have valued it at $1 billion.

Twitter has been making an undisclosed amount of money by providing Google Inc. and Microsoft Corp. with access to messages for their search engines. Many people expected Twitter would eventually introduce advertising.

In a blog post Tuesday, company co-founder Biz Stone said the company took its time "because we wanted to optimize for value before profit."

These tweets are to be "called out" as ads on top of search results on Twitter, much as sponsors can pay for listings atop rankings on search engines such as Google, Microsoft's Bing and Yahoo. That means Twitter users would see the new ads when they search broadly for topics being tweeted about.

However, many users connect with the service not through such searches or even visits to the site. Rather, scores of outside programmers have written mobile and desktop software that can access the feeds of Twitter messages that users get from people they are "following" on the site.

Twitter said it might take the Promoted Tweets service further and make them also show up on those feeds.

Stone said Promoted Tweets will need to resonate with users. If a Promoted Tweet isn't replied to or forwarded by other users, it will disappear.

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On the Net:

http://blog.twitter.com/2010/04/hello-world.html

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AP Technology Writers Barbara Ortutay and Peter Svensson in New York contributed to this report.