Twitter Opens Doors to Advertisers

Twitter, the social networking Web site that has drawn tens of millions of users but has yet to turn a profit, has changed its terms to potentially open up the free service to advertisers.

"In the Terms, we leave the door open for advertising," Twitter co-founder Biz Stone said in a post on his blog earlier this month.  "We'd like to keep our options open as we've said before."

Twitter is a free microblogging service that allows users to send and receive messages of up to 140 characters known as tweets.  Since its launch three years ago, Twitter has experienced explosive growth and received tens of millions of dollars in investments but hasn’t generated any revenue.

The new terms read:  "The Services may include advertisements, which may be targeted to the Content or information on the Services, queries made through the Services, or other information.  The types and extent of advertising by Twitter on the Services are subject to change.  In consideration for Twitter granting you access to and use of the Services, you agree that Twitter and its third-party providers and partners may place such advertising on the Services."

Twitter has been exploring ways to generate revenue.  Earlier this year, Stone floated the idea of charging fees for Twitter accounts used as a marketing tool by businesses.  In June, Twitter started issuing authenticity badges as a way to verify that people "tweeting" are who they claim to be.  Such badges are seen as something businesses might be willing to pay for.

Why it matters: Social networks like Facebook and Twitter are considered by many to be the next wave in advertising.  While these social networks present opportunities for online marketers, they also raise privacy and other legal questions that need to be thoroughly addressed before marketers start employing them.