Twitter announced on Tuesday that it does not plan to run advertisements on its website this year. This comes after a recent modification to the micro-blogging site's terms of service, which makes room for ads.
Co-founder Biz Stone announced that the company has sufficient funding for the time being and has emphasized that its focus is on improving search functions, adding new features and developing a revenue stream around commercial Twitter accounts. At present, the two-year-old company does not have a revenue model.
At the 140: Twitter Conference in Los Angeles, Stone said, "Any kind of approach toward advertising is going to be awhile." The company isn't quite ready to make the plunge, though, he continues, according to a Reuters report, "We're not thinking about that just yet."
Talk of the possibility of advertising was raised with the recent change of Twitter's terms of service, which state that "services may include advertisements, which may be targeted to the content or information on the services, queries made through the services, or other information."
Instead of relying on advertisers, Stone seems committed to developing premium services for commercial users as a way to drive revenue to the still new company. These accounts would come with analytical tools that could be used to gain insights into Twitter user behavior.
Though no additional details are available, it seems as though they would resemble, at least in concept, the web analytics utilities like Google Analytics and Omniture SiteCatalyst that are available for web tracking and intelligence.
This approach would help commercial users (such as consumer product brands) to advance their use of Twitter from brand reinforcement and basic consumer interaction to the measurement of activity, relative determination of tweet value and ultimately contribution to conversion and sales.
At issue, of course, is how to make the most of Twitter's 44.5 million monthly users (according to comScore data for June 2009), both for itself and for potential subscribers to paid premium services. While the attraction of Twitter to both consumers and businesses has been demonstrated through its growth, the company will need to find a way to satisfy its investors.