There's no such thing as a free lunch at Twitter

It was always going to be a question of when rather than if Twitter started carrying ads.

The news that the microblogging service is ‘‘keeping its options open’’ to advertising comes as no surprise. Its meteoric launch as the social network de nos jours has come at a cost to investors; US$55 million ($63m) and counting, though it has yet to burn through that all. However, it’s clear a heavy hint has been dropped; it’s time to make some money.

Twitter’s terms now say: "Services may include advertisements, which may be targeted to the content or information on the services, queries made through the services, or other information."

The unanswered question is what kind of advertising and how the 45 million people - 700,000 of which are in Australia - will feel about being ‘‘monetised’’.

Twitter founder Founder Biz Stone wrote in his blog in May: ‘‘The idea of taking money to run traditional banner ads on Twitter.com has always been low on our list of interesting ways to generate revenue.’’ Phew. But that was then and this is now.

Twitter always said that 2009 was the year for generating revenue. It is already exploring a number of avenues, namely pulling together tweets by specific groups of people and allowing third parties to sponsor them. Twitter then shares the ad revenue with them. Microsoft sponsored the first effort, ExecTweets, a collection of tweets from executives.

It is also wants to turn all those shopping recommendations or requests for information that proliferate the site into money, possibly by venturing into e-commerce deals.

Then again perhaps Twitter doesn’t know what it wants and is tossing the idea out there in the hope a business model will come back, as Marcio Nery who heads up the social media division of Mitchell Communications Group believes. ‘‘They probably don’t know what model will work. All they know is that they doesn’t want to annoy their users.’’ Let's hope so.

Not that advertising has dented Facebook’s popularity. Tony Thomas CEO of The Population says: ‘‘You are always going to upset the purists but there’s a growing acceptance that you don’t get something for free.’’ It’s hardly a revolutionary model- remember free to air television? And look how well that’s doing.

If Twitter is mad enough to start placing ads in between Tweets and selling off large chunks of ‘‘advertising inventory’’ to companies who want to reach its rusted on audiecne then it can expect a rough reception, as Facebook found earlier this year when it changed its terms and conditions to allow it to wrest ownership of users's personal information even after they were no longer Facebook members. The resultant furore forced Facebook into an embarrassing about turn.

And what about all those risk-averse marketers who bang on endlessly about the level of ‘‘engagement’’ and ‘‘relationships’’ that these sites offer yet are too scared to place their brand in an environment where they no longer have control.

Smart companies are already using Twitter without paying a cent for ‘media’. A recent successful Australian campaign for Levi’sshowed how when the company released hundreds of free pairs of jeans onto the streets and encouraged followers of its Twitter site to bail up those people they suspected were wearing Levi’s. If they were then the person immediately dropped their pants and handed them over.

Hopefully Twitter is smart enough to realise it has a community of users rather than an audience to be 'sold' on to advertisers. Either way we have a few month’s grace before we learn yet another way to avoid ads.