Twitter sales top $4 million; ad business planned

Twitter Inc., the social-networking company valued at $1 billion by venture capitalists, said it is generating sales of more than $4 million a year and plans to build on that revenue with advertising.

Twitter plans to start the ad business in early 2010, Chief Operating Officer Dick Costolo said today at a conference in San Francisco. The current revenue comes from companies paying to use Twitter's data, such as Microsoft Corp. displaying Twitter updates in its search results.

Twitter -- a free Web service that lets people post 140- character messages, or tweets -- is starting to concentrate more on revenue. Since it was founded in 2006, the company has mainly focused on attracting users and improving its product. Twitter, which has more than 58 million users, has raised about $155 million in venture capital, Costolo said.

"We will have an advertising strategy," he said. "We want to do something that's organic and in the flow of the way people already use Twitter -- and not, 'Here's the tweets and here are the ads.'"

Twitter, based in San Francisco, also plans to offer commercial accounts, which would let businesses analyze tweet traffic, Costolo said. For example, companies could monitor complaints about their products or track consumer trends.

The company received venture funding in September that valued Twitter at about $1 billion, according to a person familiar with the matter.

Twitter received about $100 million in the deal, according to a filing. The investors included T. Rowe Price Group Inc., Insight Venture Partners, Spark Capital, Institutional Venture Partners and Benchmark Capital, Twitter said.