Bill Gross on the paid-search Twitter model

Founder of eToys, Idealab and Postup ushers in the popular Google model to the Twitter ecosystem

PostUp is set to release Thursday morning a cost-per-click bidding service to a limited group of users. This bidding service allows registered PostUp users to bid a minimum of $1 on keywords, like "social media guru" or "President Obama," and show up on PostUp widgets, which are starting to be seen across the Web.

While PostUp, which raised $3.5 million from Idealab, and other leading venture firms, such as Index Ventures, Revolution, and First Round Capital, has some 13.000 members, the rollout is limited to a few hundred, according to Idealab's Steve Chadima.

To learn about PostUp, I recently sat down with Bill Gross, founder of Idealab, which is incubating PostUp. Bill has taken the role of CEO at PostUp as well, meaning, among other things, that Bill spends a lot of time about 20 feet away from his Idealab office and at the desks of the PostUp team. At Idealab, there are some dozen incubated companies including Snap and X.com, all seated in groups to separate the companies. But they all eat and share space together.

So, what is PostUp exactly?

PostUp is an ad network of sorts that is trying to recreate the auction-styled keyword bidding model into the Twitter ecosystem. Much like Google's AdWords, an advertiser, or in this context, a publisher, can bid for a keyword and show up in search results. Those search results appear in widgets that are on Idealab partner sites.

Right now, PostUp has partnered with some 15 blogs and service tools, such as Answers.com, Conduit, Topix, Twidroyd, Seesmic, TheFreeDictionary, Business Insider and TechCrunch. Because of those relationships, PostUp's widget can count up to 400 million impressions per month.

The idea is that if a person reading an article about Playstations on a publishing partner, like Business Insider, he or she might want to find relevant articles on that topic. So, they'd type in, say, "Playstation" into the PostUp search field and a list of relevant authors on that topic would appear. That's where the payment and bidding comes in. At the moment, the author of a Tweet's relevance is based on many factors,  including how often they Tweet, followers, measure of influence as noted on Klout, how often they get Retweeted, and now - the bid they're willing to pay. So, if all things being equal, and Playstation writer A pays $1 while Playstation writer B pays 90 cents, then Playstation writer A gets listed first.

If a reader clicks on that author's profile, then PostUp pays the publisher, in this case, Business Insider, 50 cents.

Revolutionizing the Twitter ecosystem

Bill should know this well. The auction-styled, paid-listing model was, after all, originated at Goto.com, an Idealab company. GoTo eventually went public, changed its name to Overture, which was soon acquired by Yaoo. The auction-styled paid listing model was then copied, err... embraced by Google.

In this interview, Bill talks about what needs to happen in the marketplace for this type of model to become mainstream.

Those around during the early days of the commercialization of the Web will recall that it did take some time before Google noticed the scalability and simplicity of the paid-search model for search. Before this "auction-styled" bidding was applied to search, one of the business models was to license search technology. It was this revolutionary model that made Google what it is today.

It's the same one that Bill wants to do for the Twitter ecosystem.