Dow Jones Newswires-Wall Street Journal | Twitter Inc. will
start rolling out advertising to users Tuesday, the four-year-old
company’s first significant attempt to turn its microblogging service
into a profitable business.

The company plans to announce a new service called Promoted Tweets, a
Twitter spokesman said. The ads will appear at the top of search
results for searches users conduct on Twitter, a model similar to
Google Inc.’s wildly successful search advertising system. Over time,
they may appear in the stream of posts users see when they log into the
site.

The San Francisco startup will begin rolling out the ads to 2 percent
to 10 percent of users Tuesday and more in the coming days, the
spokesman said. There will be around 10 initial advertisers, including
Starbucks, Virgin America and Best Buy.

Advertisers and users have been waiting for years for the hot upstart
to settle on a formula for ads. While the company has tens of millions
of users and has raised hoards of venture capital, most recently at a
$1 billion valuation, it has only recently begun to earn revenue from
providing its Tweets to larger Internet companies like Google and
Microsoft Corp.

Twitter’s chief executive Evan Williams and co-founder Biz Stone have
been publicly lukewarm about advertising, suggesting it could irritate
users. They emphasized that they were exploring a range of monetization
models including enhanced services for businesses. Advertising
executives have been skeptical that Twitter could build a formula that
would appeal to advertisers more than Google’s search ads or other
display or banner ads.

For now, Twitter’s ad-matching and pricing formula is a work in
progress. The company will start by charging marketers per thousand
impressions of their ads. Over time, it plans to move to a more complex
model, charging based on how users interact with the messages. The
Twitter spokesman said it won’t show ads that don’t receive a certain
“resonance” score, based on factors like how many people clicked on or
forwarded the ad.

The new feature could appeal to the millions of businesses who have
created accounts on the service to share deals and other corporate
updates. Today, those brands must get users to follow them to get out
their message. Now, they will be able to push their message to users
who search any keyword they buy.

-By Jessica E. Vascellaro, The Wall Street Journal; 415 765 6154; Jessica.Vascellaro@wsj.com