When will Twitter start generating money through the advertising medium?

Twitter is the million dollar baby and the trillion dollar question is “When will Twitter start generating money through the advertising medium?” . Towards this, I reproduce Biz Stone’s (Founder, Twitter) version of commercial usage, revenue generation, and advertising which he had posted on his blog.

Source: Does Twitter Hate Advertising? (Blogger): May 20, 2009

When we speak publicly about how Twitter might become a profitable business, we talk about the idea of commercial usage and then explain that we're still exploring what that means—that's true. We also say traditional web banner advertising isn't interesting to us which is also true. However, to say we are philosophically opposed to any and all advertising is incorrect.For a long time, we've said that we think there are interesting opportunities related to commercial usage. Businesses and individuals are getting value out of Twitter and we may be able to enhance that. We've just begun exploring in this area—early ideas include account authentication, management tools, and discovery mechanisms. We'll keep you posted.The idea of taking money to run traditional banner ads on Twitter.com has always been low on our list of interesting ways to generate revenue. However, facilitating connections between businesses and individuals in meaningful and relevant ways is compelling. We're going to leave the door open for exploration in this area.Do we hate advertising? Of course not. It's a huge industry filled with creativity and inspiration. There's also room for new innovation in advertising, marketing, and public relations and Twitter is already part of that. In fact, next month I'll be attending and speaking at the 56th annual international advertising festival, Cannes Lions 2009. I'll let you know how it goes.

Essentially, Biz Stone speaks about expanding the value in Twitter (related to commercial usage). Twitter is largely exploring the value that it can create and add to individuals and businesses as a meaningful, relevant and compelling way to make monies. Traditional banner ads are dismissed as a low priority activity which is low in the list of “ways to generate revenue”.

The cost of Online Ads in terms of consumer experience and satisfaction

http://www.watblog.com/2009/02/05/would-you-wait-for-a-website-to-load-for-more-than-4-seconds/#comment-14833
Eklavya Bhattacharya, Portal head, Contest2win.com has a point regarding speed, user experience and satisfaction in the web world!

Google ran an experiment where they increased the number of search results to thirty per page. Traffic and revenue from Google searchers in the experimental group dropped by 20%.
Why did that happen? Didn’t users want more?
Well Google found an uncontrolled variable.The page with 10 results took 0.4 seconds to generate. The page with 30 results took 0.9 seconds.
Half a second delay caused a 20% drop in traffic. Half a second delay killed user satisfaction.

Amazon.com had a similar experience…They tried delaying the page in increments of 100 milliseconds and found that even very small delays would result in substantial and costly drops in revenue.

A recent report comparing the service efficacies between Search Engines, Goolge, Yahoo and MSN. The result was that Google is as a favourite by many users because of its simplicity of the pristine front end. Its simple, easy to understand and use, intuitive and “light”. It gives the feeling of simplicity and earnestness. MSN and Yahoo have a lot of other elements and frames in the page, which make them slower and don’t give them the pristine feeling! Thus a single frame, pure white search page with only a few other pointers in Google outscores the heavily loaded MSN and Yahoo search engines many times over. That Google has made an internet empire out of serving the needs of consumers by email service, unlimited data and photo store, blogs and adwords is another thing altogether different.

Point i try to make here is, banners and pull page pop ups and peeling ads on the page may be a great "eyeball catching" places which gets the mothersite ad revenues. However, it is equally important, that the ad revenue lure doesnot reduce the customer experience in terms of page loading time, graphics, distorting the view and obstructing information on the page of the original website. These seriously hamper the customer experience! While older users may still decide to stick through because theyhave lot to loose not coming to the website, new comers may not take such a favourable view of the website. Thus one has to balance/ tarde off these aspects in online advertising with consumer experience.