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dickcostolo050Twitter COO Dick Costolo is on-stage at the Real-Time CrunchUp in San Francisco. I’m taking some notes as we go.

The big takeaways are that Twitter is making more than $4 million a year, but won’t specify how much and that’s through the recent data-sharing deals with Microsoft and Google.

Next, Twitter is going to roll out advertising soon. Costolo says, “You’ll see an advertising strategy from us in the near future. It will be fascinating and completely non-traditional, and people will love it.”

Twitter is also on track to roll out paid commercial accounts by year-end.

Here are my notes:

[Costolo talks about why Twitter changed the question from “What are you doing?” to “What’s happening?”]

Costolo: In user research, people would sign up for Twitter and they’d see this big white box that said “What are you doing?” And they would say, “What am I doing? God, I’m not doing anything.

By the way, this is what we’re spending the venture round we just raised on.

Anyway, we have this on-boarding challenge [challenge of attracting and keeping users]. And we’re doing a lot of simple things — two include replacing the suggested user list with more elegant suggestions for people to follow.

[Arrington asks when’s that going to happen.]

Costolo: No firm date for that. I hope it’s gone by the end of the year.

[Arrington asks about Costolo’s history at Feedburner, which was sold to Google. Does he think RSS is dead]

Costolo: RSS is not dead, It got pushed down the stack. It’s like HTTP, no one thinks about it anymore. You just use web sites. It got pushed down the stack, which is what happens to protocols as they mature.

[Arrington asks about Twitter’s internal documents, which were released earlier this year. They projected $4 million in revenue by year-end. Arrington asks how they’re doing compared to those projections.]

Costolo: We’re well above all those numbers.

[Arrington asks about user count.]

Costolo: These services measure count in traditional ways. They measure traffic to the site, but it’s no secret there are tens of thousands of different applications. I’m instead going to say those numbers shortcount Twitter significantly.

Arrington: So 58 million shortcounts Twitter?

Costolo: Yes.

The other thing I would say about user growth is that it’s diminished significantly for us in the U.S. Hopefully the suggested user list goes away soon. Those are super small things. There are a lot more sophisticated things we can do to on-board users.

Arrington: How much have you raised?

Costolo: $155 million.

Arrington: How much is left?

Costolo: Plenty. Our run-rate and burn-rate. We’re not going to be needing to do anything anytime soon.

Arrington: So you have those new Bebo offices? That’s not cheap.

Costolo: There are cheap ways to do things and expensive ways to do things. One of things that anybody with an investment would do is measure burn or EBITDA rate and that’s one of the last things I’m worried about.

[Arrington asks about revenue. How will they turn it on without impacting user experience?]

Costolo: It’s on.

[Is that the search deal or advertising?]

Costolo: We’re obviously not going to talk about the details about those relationships, but they’re financial. And that’s been said as much by all parties involved. They’re compelling. They point to how we’re going to market. We’re an open ecosystem, allowing partners to have access to the tweets. I think and hope it’s sophisticated enough to pre-thought about the implications of displaying tweets on other sites. We shouldn’t care about whether people are coming to Bing or Google for search results, instead of Twitter.com. We’ll provide all these companies with a mechanism for leveraging the APIs that will make them a lot of money.

[Arrington asks what Costolo uses to access Twitter.]

Costolo: I’m old-school. I use Twitter.com

[Arrington asks about geo-location API.]

Costolo: It’s huge. If you look at Foursquare, the check-in is an explicit way of opting into sharing your location. The big challenge with geo, is you’ll turn it on and forget to turn it off. The cool thing about what Dennis Crowley has done at Foursquare is he’s made location sharing explicit for a short-time with the gesture of checking in.

[Costolo starts talking about the business model.]

Costolo: You’ll see an advertising strategy from us in the near future. It will be fascinating and completely non-traditional and people will love it.

[Arrington asks what’s new.]

Costolo: The genius of Google was that when they first rolled it out — the ads were what people were looking for. What we want to do is to do something organic, where it’s in the flow and where it matches what people want. It’s going to be really cool.

[Arrington: People will love the ads. They will have never experienced so much joy as when they see these ads.]

Audience questions.

We’re going to offer a way for our partners to make money. The whole idea is we’re going to be open. We’re going to foster ubiquity of the tweets. If you’re a startup and you have this great idea about using tweets, you should be able to do that.

But for companies that want to work with us at a more in-depth level with a service agreements, we’ll provide mechanisms for partners to do that.

Steve Gillmor: Is there going to be a Twitter app store?

Costolo: It’s not top of mind for us. The most important things are on-boarding and discovery. We don’t spend a lot of time thinking about an app store. It’s a debate that rages internally that we don’t feel urgency around right now.

[Arrington asks about new features. Costolo talks about all the new products lately — lists, Twitter in French, geo-location API.]

Costolo: There’s a pace of execution that’s remarkable given the scaling.

[Audience asks about analytics.]

Costolo: We’ve talked about commercial accounts. One of the pieces will be an analytics dashboard. Other features will allow multiple people to edit an account. We continue to be on the timeframe of rolling it out soon.

[Kevin Marks asks about openness.]

Costolo: I think the question was an accusation question. Kevin and I have known each other for awhile. Why don’t we — when our engineers interview people, one of the questions is, tell me about your contributions to open-source. I’ve never seen people working harder and more passionately. People are just absolutely — the pedal is to the ground. When you see, when we have more engineers in-house, we’ll be more participatory. We use open-source. We hope to be advocates of it.

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