Twitter starts rolling out promoted Tweets

Twitter has started rolling out “promoted Tweets,” which Twitter users will see regardless of who they follow, the company announced Tuesday afternoon.

“Promoted Tweets are entering a new phase,” the company said in a statement. “We’re expanding testing in the timeline with a small number of users.”

Here’s how the new ads work: Say you don’t follow Best Buy. Ordinarily, you wouldn’t see any tweets from the company. But if Best Buy pays for a certain kind of advertising on Twitter, you would see tweets from Best Buy when you log in.

The company is also working on more refined ad targeting, and Twitter chief executive Dick Costolo said Twitter already sees robust engagement around advertising content on the service. He said Virgin had its fifth largest sales day ever due to a Twitter campaign at a breakfast at the company’s headquarters last week.

Twitter confirmed that it is raising a large funding round from Russia’s DST, the investment company that has backed Facebook, Groupon and Zynga. The round is rumored to be around $800 million across a two-part funding round, which would value the company at nearly $8 billion.

Twitter has more than 300 million registered users who post more than 200 million tweets a day. Valued at $3.7 billion after its most recent round of funding in December, 2010, Twitter makes $200 million each year, according to analysts cited in the report.