Why do people care how Twitter will make money? "We won't know where we, the users, fit in -- until they tell us how they're going to make money," Dave Winer wrote a year ago this week, "And when they tell us, we may not like it." That's one reason why people care how Twitter makes money.
Whether you're a person concerned that the popular social network you're investing your time and energy in might monetize in an anti-social way, or you're a skeptic who refuses to believe that the world-changing potential of Twitter is real until it proves itself economically viable - you probably heard that Twitter announced tonight it's got a plan for advertisements. You can breathe a sigh of relief; the plan is downright boring, just as it should be.
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Advertisements will begin in search, with keywords being bid on and a single advertisement appearing with frequency dependent on its performance. Then the ads will be extended to 3rd party applications like TweetDeck and others. It's unclear who will use it, Tweetie got bought by Twitter last week and Twitterific has its own ads, but other apps will come and go, hopefully given the option (not the requirement) to show Twitter ads to their users.
Finally, ads will begin to appear on Twitter.com, tailored to the interests of users, as easily observed by their messages published and received.
This is great: it's relatively non-invasive, nothing too crazy, nothing terribly exploitive. Some people who insist on reading every Tweet in their stream will probably be annoyed once they find ads in it, but there are already lots of unofficial ads being published on Twitter and maybe this will break those people of the habit of obsessing over every little message.
This is surely not the intention behind the plan, Twitter HQ itself is full of people who spend time carefully pruning their streams. Twitter's new head of PR Sean Garrett, for example, quit following NBC's @newmediajim and media analyst Shelly Palmer last week, something it's hard to imagine him doing for any reason other than concern about signal-to-noise ratio and an unhealthy concern with reading every one of the Tweets in his stream.
But the point is this: it appears that no baby animals will be hurt in the making of the Twitter.
Along with the big search deals with Google, Microsoft and Yahoo, and the forthcoming availability of power Commercial Accounts, Twitter seems to have found relatively non-violent ways to monetize. As long as the firehose of user activity data is in fact made more widely available and not kept from small innovators, and as long as regular accounts aren't handicapped in order to make commercial accounts more appealing - then these three plans together look pretty good.
It's not banner ads, it's not sales of data to direct marketers, it's not licensing access to Direct Messages to the CIA. Twitter is at its best when it keeps things simple, when it stays out of the way and acts like a dumb, if textured, pipe. Put a contextual ad up to keep the lights on, what do I care?
It's entirely predictable, shouldn't hurt too much and might even work. As Liz Gannes said so well in her headline at Gigaom tonight: "The Twitter Ad Model Revealed (What Were You Expecting, a Pony?)"
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