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Ads on Twitter? They already exist — just not where TechCrunch's Duncan Riley thought they appeared. Twitter cofounder Biz Stone denied Riley's report, telling Silicon Alley Insider, "We're not putting ads on Twitter.com" — meaning Twitter's website. Of course. That would be the stupidest imaginable place to put ads, and Stone knows it. Which is why, for almost half a year, Twitter has been running ads elsewhere.

Twitter messages are limited to 140 characters, a space constraint meant to allow them to be sent to cell phones as text messages. Many of them are shorter, though, and Twitter has been using the remaining space to place house ads since last October, as entrepreneur Charlie O'Donnell first noticed. They began as jokey little asides: "Tip: Wow, you look *good." But they've since changed to tips about Twitter features. As O'Donnel noted, it's a simple step for Twitter to switch from advertising its own products to advertising others: "Tip: Drink Jamba Juice."

Google and others have struggled to sell ads profitably on social networks like MySpace. Stone and his cohorts, no dummies, have to have noticed this, and concluded that placing ads on the Twitter.com website is foolish, provoking user outrage for little payoff.

Advertisers, meanwhile, are hankering to reach people on their cell phones. Using the remnant space in Twitter messages is a simple way to do so, and hard to turn off without disconnecting from Twitter altogether. In this effort, Twitter's biggest rival will be its power users, who have already figured out that Twitter is a perfect way to send out spam to their so-called friends.