Twitter HTML notifications = ad revenue model?

I was sending direct messages back and forth with a friend via Twitter today when I was suddenly hit with a big blue surprise -- an HTML notification rather than plain text.

I was taken a bit off guard. Especially since earlier in the DM conversation DMs were coming in the way they always had. Did Twitter flip some sort of switch? Or am I just lucky?

Either way, I immediately went to Twitter to state my surprise (and complain a little, as this new design looks awful on my wonderful BlackBerry Curve). My very smart friend Jason Baer said to me:

Yes, of course. Why didn't I think of that? Advertisements delivered via HTML DM notifications would be a great -- and not incredibly intrusive way -- for Twitter to build a small bit of revenue. They've made similar changes to their new follower notifications. Definitely more effective than the mini ads they have on the main profile page. I wish I'd thought of this on my own, so kudos to Jason. However, all hope for me is not entirely lost.

Twitter faces a couple of challenges in terms of developing an ad model:

• More users rely on third-party platforms to tweet and rarely hit Twitter Web
• The whole Magpie / ads within the Twitter stream concept has been a failure

Ads delivered via DM notifications is a less intrusive way to put Twitter space buyers in front of customers in a way they already opt into emails. Not to mention, regardless of the platform you use (i.e. TweetDeck allows for a DM column) most people still have DM notifications set in order to support their smart phone use of Twitter. While it currently looks pretty icky on my BlackBerry, I am sure that can be improved over time, but I'm still getting the notifications in my inbox.

There's been a lot of speculation as to how Twitter will monetize. Jeremiah Owyang has talked about Twitter as a CRM service model for some time, an idea that can still work and would be complementary to this type of ad model. I even wrote several months ago about how Twitter's election-themed mash-ups could be another opportunity for revenue. Both the mash-up idea and the DM ad idea are especially poised to take advantage of Twitter's mass influx of consumer users, while the broader (and more technologically challenging) CRM service model is poised for business users.

Is it possible that Twitter has determined a way to find success in both worlds?

We'll see. In the meantime, I'll be keeping an eye out for these email ads. Let's see if Jason and I are right. If not, it's still a pretty good idea. Don't you think?