Despite its explosive popularity, Twitter hasn’t been able to establish a means of monetizing their microblogging service beyond its Google/Bing partnerships.  Through their latest round of funding that ended last summer Twitter raised $100 million, a budget that’ll allow them to experiment with different business models to generate revenue.

According to AllThingsD, Twitter’s first monetization strategy will follow Google’s approach to search ads.  Searches done within Twitter will include ads based on the search criteria.  All ads will follow the traditional Twitter format, limiting them to 140 characters or less.  Third party software and services will have access to Twitter’s API to include ads within their search functions.  To encourage these third-party developers, Twitter will adopt revenue sharing with those that decide to participate.failwhale

Google’s advertising has been so successful because they’ve gathered tons of information on each user, allowing ads to hone in on the appropriate audience.  If Twitter finds this model to be successful, it wouldn’t be surprising to them aggregating information that users are searching for or even accessing a user’s public tweets for more effective advertising.

As Twitter experiments through various advertising strategies, many users will be put off by the transition if for no other reason than a change.  It seems they’re well aware that they can’t plaster ads in a users timeline which would be a much more intrusive campaign.  Keeping the advertisements delegated to search means users can completely avoid these ad tweets for most of their Twitter activity.

We’ve got no way of knowing if there’ll be changes until the implementation rolls out later this year, but from what’s been heard, they’re heading in the right direction.  How would you introduce ads to Twitter?  Leave your suggestions in the comments.

[Via AllThingsD]