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Twitter cuts the cord on third-party ad networks

Companies that post sponsored tweets in Twitter streams are now banned from its API, but, for those who care, Kim Kardashian is still allowed to charge $10,000 for a paid tweet.

Third-party ad networks have been officially banned from Twitter, according to a post on the Twitter blog on Monday from Chief Operating Officer Dick Costolo. It's a move that could drive some of the advertising start-ups that have built around Twitter out of business.

"We will not allow any third party to inject paid tweets into a timeline on any service that leverages the Twitter API," the post read, explaining that the exception will be Twitter's own "promoted tweets" program that it announced earlier this year.

"Third party ad networks are not necessarily looking to preserve the unique user experience Twitter has created," Costolo's post read."They may optimize for either market share or short-term revenue at the expense of the long-term health of the Twitter platform. For example, a third party ad network may seek to maximize ad impressions and click through rates even if it leads to a net decrease in Twitter use due to user dissatisfaction."

But the straight story is that these third-party networks--include Adly and the just-launched TweetUp--now compete with Twitter itself for advertising dollars.

As Twitter has moved from open-ended communication platform (and investment dollar black hole) to structured company with a nascent business model, many of the third-party companies that built businesses (in some cases, profitable ones) on top of its API have felt the heat. Prior to its unveiling of the Promoted Tweets advertising program, Twitter announced that it had acquired iPhone client Tweetie and would launch other official mobile clients as well

Twitter confirmed to CNET that this does not have any bearing on marketers working directly with prominent Twitter users to post paid tweets--reality show star Kim Kardashian reportedly has a rate of $10,000 per sponsored tweet.

When Twitter confronted nervous developers at its Chirp conference earlier this year, the company insisted that they would not be snuffed out because it would be launching deeper and more advanced ways for third parties to tap into its system. In the blog post Monday, Twitter kept up this olive-branch mentality with regard to the "Annotations" metadata product that it announced at Chirp. "When Annotations ship, there are going to be many new business opportunities on the Twitter platform in addition to those currently available," Costolo wrote. "We know that companies and entrepreneurs will create things with Annotations that we couldn't have imagined."

Still, at least for now, a handful of companies are going to have to scramble or else risk being snuffed out. First it was Twitter clients, and now advertising start-ups--other niches of Twitter developers must surely be concerned they might be next.