The problem with “another Adwords” as Steve mentions is that Adwords is built on matching statics. Google’s entire search system is based on matching which heavily favors the old (longevity = credibility) statics.
A static matching system like Google won’t work well for Twitter as it’s content’s (or index) is not static, nor does it’s value to advertisers lay in history (at least not yet). It’s value lies in the here and now.
So in actuality the platform has to function in the exact opposite of how Adwords was constructed.
Ads next to a conversation is just like display and search ads. People will ignore them.
And ads inserted in a conversation (as many suggest) is just weird. Like us talking and then I blurt out a brand associated with whatever we’re discussing. People won’t accept that.
Now If you listen to how they talk about the future of Twitter (like everyone using it within five years) you will see that they talk a lot about showing companies how to <insert something>.
The greatest value in Twitter is the conversations.
So what they will probably look to do is build a system for companies that allows them to spot conversations about involving or close to them AND THEN introduce the company into the conversation.
Sort of how you’d do if we were talking about someone you knew (but I didn’t). You’d pull them in to participate.
People (Twits) will LOVE this because what they really want when discussing a product, service or company is that company’s attention. Because people naturally crave attention for their expressions – whether they are bitching or raving.
Twitter then acts as a “trusted friend” (because you LOVE Twitter right) that adds “value to your conversations by introducing you to what your interested in” and “trusted partner” (because you LOVE Twitter right) that connects you with “valuable conversations about your brand and products.”
The ultimate “commerce and service engine” for advertisers. Better then Google for the user.
Because they (the advertiser) are coming to you (the Twitter user) in “real time” rather then you seeking (searching) for them. Giving you what you want exactly as your thinking about it.
For it doesn’t just solve problems (like generating new customer acquisition) for advertisers but spots them (like an unhappy customer upset about a transaction in your Chicago location). It doesn’t get more targeted and intimate then that.
This will be the most profitable way for Twitter to monetize. Perhaps the most useful service for advertisers and users ever?