GastaTech Update: Twitter to share revenues

Twitter API to Get Ads Inserted, Revenue to be Shared With Developers
By Marshall Kirkpatrick

Twitter has taken the first steps to begin inserting sponsored Tweets and Trending Topics into the Application Programming Interface (API) that 3rd party developers use to display search results to users. Additions to the technical code are being made now but no ads will actually apear until a later, undetermined date.

Developer advocate Matt Harris explained in an email to the Twitter developers email list this afternoon that the insertion of ads will be beta tested with a select group of developers before becoming generally available. Perhaps the biggest news: Twitter will share its revenues with the applications that show the ads. "We're still working out the exact value," Harris said today

tweetdewittWill showing ads be required? There's no information available about that yet. (Update: Twitter contacted us and said no, it will be opt-in.) Putting ads in search and trending topics is an unobtrusive way to serve them though. It's much better than the nightmarish scenario some people feared: ads being placed directly into the streams shown to users in Tweetdeck, Seesmic or other apps. Twitter banned clients from inserting their own ads in the stream this Spring. This announcement does not mean that ads will be in the stream, quite the opposite in all likelihood.
Will These Ads Move the Needle?

A revenue share could have a disproportionate impact on the handful of popular Twitter clients, which might see meaningful monetization, and small apps - where the user experience is likely to be impacted more than anyone's pocketbook. As the 17 year old developer of a Mac Twitter client called xiTweet said this afternoon, "This will either make the people of TweetDeck etc *very* rich, or it won't get the smaller developers (like myself) a thing."

Twitter's new ad units have seen some early success and little to no backlash so far. Might a revenue split move the needle for developers? I'd be surprised if users do as many casual searches for hot topics in 3rd party clients as they do on the site, or if general trending topics are as closely watched by the kinds of advanced users who use that kind of software.

Time will tell - but this is an important move that the Twitter developer and user ecosystem has been waiting for.