Why: Now that the company has begun to make money from its large user base, a service that has woven its way into everyday life is more likely to stick around.

Key innovation: Its business model offers selected opportunities for advertisers while drawing income from deals that let search engines index its content.

Technology:

Twitter provides a social-networking service that revolves around 140-character messages called “tweets.” Posts on Twitter can be sent and received with mobile phones, over the Web, or through a wide variety of third-party desktop programs. The company also built an interface that makes it easy for other websites to pick up feeds of data from the updates that users provide constantly.

Market:

Though Twitter has struggled to find a business model, it’s had no trouble attracting people to its service. There are now 200 million registered accounts, through which people post over 100 million tweets per day.

Strategy:

In 2009, Twitter made deals with Google and Microsoft’s Bing search engine, both of which spotlight tweets as part of their efforts to include more real-time search results. Last spring, the company introduced a service where businesses could pay to have their tweets “promoted” to the top of Twitter search results. In October, it went a step further and started suggesting to users that they follow an advertiser’s account based on an algorithm that gauges their potential interest.

Challenges and Next Steps:

In its fledgling efforts at monetization, Twitter faces stiff competition from more established companies in the social media business, such as Google and Facebook. In the past, Twitter struggled with scaling to meet the needs of its avid user base, but after a recent redesign of its site, the service is seeing less downtime than at any point in its history.