Peter Kafka

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Twitter to Rival Ad Players: Tread Carefully

Twitter has started showing ads to its users. But Twitter is not the only one doing this–there’s a host of start-ups trying to insert ads into the Twitter stream, and more on the way.

So here’s a question: Will Twitter force publishers and app developers to use its ad platform exclusively?

No, says COO Dick Costolo.

In theory, he says, it would be possible for someone like TweetDeck or Seesmic to use Twitter’s “sponsored tweets” offering along with something like 140 Proof, which also places ads, in the form of tweets, into users’ streams.

After all, conventional Web publishers can use Google’s (GOOG) AdSense products and competing ad networks. Why shouldn’t the same thing work for Twitter?

But Costolo also has a warning for anyone who does sell ads in the streams: Tread very, very carefully. Here’s an excerpt from an interview I conducted with him this afternoon.

Clients can use our system and other ad systems at the same time. The distinction I would make, or the caveat I would add to that, [is that] we are going to probably prohibit pieces, insertions into the timeline that cause user confusion.

So for example, if someone creates an ad that looks like a tweet in the timeline, but isn’t a tweet–such that if you click on the retweet button, you go to a landing page, instead of retweeting the tweet–that’s something [that] causes user confusion, it harms the overall value of the platform, and we’re going to prohibit that.

That “user confusion” theme is a favorite at Twitter. It’s the same argument CEO Ev Williams used to explain the company’s thinking behind its purchase of Tweetie last week.

Still, the Twitter ad platforms I’m familiar with–, 140 Proof, TweetUp, etc.–seem to comply with Costolo’s restrictions: All of them turn tweets into ads, but the tweet still functions as a tweet. The Twitter COO seems to have something or someone on his mind here, though.

And when he goes on to explain what he doesn’t have a problem with–ad platforms that don’t sell in the stream at all–he seems to be sending a message: If you don’t want to worry about platform conflict, the best way to do that is to avoid doing what we do.

There are pieces of the puzzle that we’re going to prohibit if we feel they harm the overall value of the platform. And that’s one example.

What I’m absolutely fine with…is a client that’s got a banner ad at the top, that’s segregated from the timeline. And that banner ad is sold by a third party, and those people decide not to participate in the promoted tweets platform. I don’t have a problem with that and we encourage that.

So make of this what you will. You can see our entire conversation below. Costolo also makes a brief version of the pitch he’s going to deliver to developers tomorrow at Twitter’s Chirp conference, and he and I go back and forth about Twitter’s intention to show ads outside of search results.