Twitter's "Promoted Ads" Biz Model is Conservative, Smart

Twitter has its first business model, finally.

Co-founder Biz Stone announced this morning on the Twitter Blog that the micro-blogging company will start running "Promoted Tweets" at the top of search results pages. Not much changes for the featured companies like Best Buy, Bravo, Red Bull, Sony Pictures, and Starbucks, who can continue Tweeting company news. The main difference is that users searching within Twitter will see one Promoted Tweet at the top of each search page. That's it.

Twitter's Business Model 1.0 is conservative, and it's a safe first step for a couple reasons. First, it keeps the product 100% Twitter, since the ads themselves are Tweets. Second it doesn't require carving out space or building a new interface or UX for new ads. Third, it's non-intrusive, since Twitter isn't forcing users to look at Best Buy computers or Starbucks' lattes in the space around their private accounts. Fourth, it's familiar. Twitter members who are used to search ads in Google and Microsoft Bing are unlikely to balk at the idea of clearly labeled promotions at the top of their results bar.

Unfortunately for the Twitter guys, the day Twitter found a business model, it lost the Twitter. As of 8:30AM the site has been down for at least 20 minutes. According to the Web site "Is Twitter Broken?" the short answer is "Sort of."

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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