Twitter tests new ad revenue source with Toy Story 3

Computerworld - Twitter on Thursday kicked off a test of a new revenue source.

In another move to make the phenomenally popular microblogging site a profitable business, Twitter unveiled its first promoted trending topic Thursday morning. On the right side of a user's Twitter page, Twitter lists its top 10 topics or trends -- basically a list of what users are tweeting about most. As of Thursday, an 11th trend was added with a yellow banner beside it saying "Promoted."

The first promoted topic was Disney-Pixar's new animated movie, Toy Story 3, which hits theaters this weekend. Click on the promoted trend, and you're taken to the latest tweets about the movie, with a promoted tweet from the advertiser appearing at the top of the search results page.

"Promoted Trends are a new advertising concept we began testing this week; they are an extension of our Promoted Tweets platform," the company noted on its Web site. "With Promoted Trends, users will see time-, context- and event-sensitive trends promoted by our advertising partners. These Promoted Trends initially appear at the bottom of the Trending Topics list on Twitter and are clearly marked 'Promoted.' As conversations about the topic increase, Promoted Trends may move up the list."

The company also said that if a topic isn't already being tweeted about, it cannot be a Promoted Trend.

Twitter didn't say how long it will test the new ad feature, noting that everything depends on how successful it is.

Ezra Gottheil, an analyst at Technology Business Research, said the ads are a smart move, since they give Twitter a revenue source without drastically affecting the user experience.

"People will tolerate advertising as long as it lets them do what they want to do," he said. "As with Google, users know someone has to pay. Users prefer it to be painless. Advertising that doesn't get in the way is generally welcomed."

Promoted Trends comes on the heels of Twitter's announcement this spring that it was rolling out Promoted Tweets, which lets advertisers pay for sponsored tweets that appear at the top of search results for certain keywords.

The company had been criticized for becoming wildly popular without the backing of a business plan. Last October, Twitter CEO Evan Williams told an audience at the Web 2.0 Summit in San Francisco that the company wanted to focus on developing the site rather than on a business model.

However, in April, Twitter finally took off the training wheels and moved into the world where real businesses tread, with the launch of its first advertising model.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

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