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Idealab brings search advertising to Twitter

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The latest contender looking to cash in on the Twitter craze right before the San Francisco Internet company’s inaugural developers conference this week is Bill Gross, the Pasadena Internet entrepreneur. He is banking he can bring the profitable magic of search advertising to microblogging.

TweetUp is an auction-based advertising system from Internet incubator Idealab, which originally came up with the idea for search advertising in the 1990s when it launched GoTo.com. Advertisers on TweetUp can bid to have their tweets displayed when users search for keywords, giving them another way to build a following. An algorithm will push the best tweets to the top based on relevance and authority, Gross said in an interview last week. The idea is to give the best tweets more prominence and a longer shelf life, he said.

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“We are going to improve the relevance of search results in billions of tweets,” Gross said.

It’s unclear whether Twitter users will be willing to pay to get their tweets noticed and whether fellow users will be turned off by the idea. TweetUp has raised $3.5 million from a group of investors, including Index Ventures and Revolution, Steve Case’s investment firm.

Gross said he got the idea while at the Copenhagen climate change talks. He had written a thoughtful blog post about renewable energy and tweeted it, but his tweet was soon eclipsed by people announcing their arrival in Copenhagen or wondering where to buy mittens there. While at the TED technology conference, Gross said he read each of the 10,000 tweets but only found 200 or 300 useful. He seized on the idea of surfacing those. He pitched his idea to venture capitalists at the conference, who immediately wanted in. So he hired 10 full-time staffers and tapped 55 people from IdeaLab to launch the company Monday.

The 4-year-old Twitter plans to announce this week its own strategy for making money. A spokesman cautioned that the company would put the interests of its users first and would continue to evolve the strategy until it gets it right.

Software developers have built some 70,000 applications to make Twitter easier to use. But they have become alarmed that Twitter might build its own applications and wipe away their hard work.

“Twitter is a 4-year-old company with a $1-billion market cap that is short on people and the ability to do everything. So there is a lot of room for exciting innovation,” Gross said. “But you have to add some extreme value to the Twitter ecosystem to survive.”

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-- Jessica Guynn

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