UPDATE 5: Now onto Q&A with Twitter's COO, Dick Costolo, whose talk you can read about in the previous update. People have a lot of questions about how "resonance" will work and be tracked--looks like Twitter will have to work on clearing up their message. One person asks, How should "resonance" decay? Costolo gives the example of an April Fool's promoted tweet, saying that it's difficult to figure out when they should stop promoting it--the day after? When should something no longer be promoted, he wonders.
"We got to figure that out," Costolo just responded to another question, which basically sums up most of his answers. Question: Does one get paid if retweeting a promoted tweet? No, Costolo says, Twitter doesn't want to incentivize this behavior. Question: Is this Twitter's long-term revenue model or Twitter's response to market demand? "We've been pretty good at not responding to market demand," Costolo jokes. It's a two pillar model: Promoted Tweets and Commercial Accounts. He says that Twitter must thread these pillars together. For example, Twitter plans to provide an "analytics dashboard," which would help Commercial Accounts understand how their Promoted Tweets are performing.
UPDATE 4: Twitter COO Dick Costolo is on stage now to discuss revenue streams. "A promoted tweet is a tweet," he says. "[They] are not ads." In a demo of these promoted tweets, we see that they have a different color background, and zoom in when the mouse hovers over them, but as he said, they just act the same as a tweet--you can reply, favorite, or retweet it.
"Promoted tweets have potential to enhance the user-experience, not harm it," he says, and then references this recent movie study  to show how Twitter can help advertisers as well. "What we didn't want to do was force a square peg into a round hole," Costolo continues. "We didn't want it to a cost per follower, or a click-through model." "Resonance," as Twitter refers to how they analyze promoted tweets, will monitor retweets, replies, tag clicks, clicks on hash-tags, clicks on avatars, clicks on shortened-links, and even impressions after a link was clicked (whether it was retweeted or not). "You start to paint this model of interest," he says, "An interest graph in real-time." He also tells the audience that this will be rolled out slowly, and that it'll start with search advertising, but quips that if it's not expanded by the end of next year that many at Twitter will be "out of a job."
"It's about the entire ecosystem making money," Twitter's presentation reads in the background. Costolo explains that they'll have a 50/50 revenue-sharing model with Twitter and its tweet promoters--which is apparently the same deal for Commercial Accounts and regular Twitter users alike.
Twitter has just invited a Starbucks spokesman on stage to discuss how they're utilizing the promoted tweets. After speaking for only a moment, the moderator interjected that what the Starbucks spokesman was describing "sounded like an ad." Costolo responds that it's more organic than an advertisement. How? The moderator points out that if a promoted tweet is no good, then it disappears. "If you promote a tweet, and it doesn't resonate, then there's no payment," says Costolo. "Once you've promoted a tweet, it's pegged to the top immediately." Therefore, you get to freely promote tweets until they actually take off--or "resonate," as Twitter puts it. Twitter says it will be scoring how well they "resonate," and publishing only the numbers and analytics--but not the formula for how they come up with these scores. "We'll try not to publish the formula because then people are going to game it." Why is Starbucks guy on the stage right now? He has barely spoke!
Dick Costolo discussess the real-time interest graph more, saying that on Twitter you don't just follow people, but you follow news networks like CNN, or sports teams like the San Francisco Giants. He argues that Twitter is not just a "micro-blogging" platform, but that you can look at someone's Twitter page, and see what they're interested in.
"We're going to be very cautious and test a bunch of different ways to expand this beyond search." One obvious way, Costolo says, that he can see Twitter expanding is with geo (geo-location), saying, for example, that if marketers are at Lollapalooza, then they can send tweets to people at Lollapalooza about certain promotions. Starbucks guy finally pipes in: "Geo is huge, that's why Foursquare is big for us."
UPDATE 3: Will.i.am of the Black Eyed Peas just came to the stage. "The Internet has been around for a while, but it has yet to produce the next Michael Jackson," says Will.i.am. Um, have you heard of Justin Bieber?
UPDATE 2: Ryan Sarver, director of platform, has now taken the stage to talk about--you guessed it-- Twitter's platform, and says that there are over 100,000 registered applications on Twitter's platform. He says what Twitter is focused on now is the "concept of location," and he announced that Twitter is working on "Places," a curated database of locations (parks, restaurants, etc.). How are they not duplicating what Foursquare is doing, again? "Location is one of those things that's just so different and fundamental," he says, describing how you can search Twitter for geo-specific tweets.
Sarver just announced an "Annotations" feature as well, which will allow tags and metadata to be added to tweets. He says it will come next quarter, but that developers can head to dev.twitter.com, which will launch later today.
Now Sarver's Q&A: will there be a taxonomy of annotation types? It's still being worked on. How will they increase geo-location features? They'll be pushing out neighborhood and city features, and will be prompting users about the added value of this feature. Sarver clarifies, "What it comes down to is building valuable services around it." He says that this is up to the developers too.
UPDATE: WATCH OUT FOURSQUARE. Twitter co-founder Evan Williams promises a "Points of Interest" feature, allowing users to check-in at certain locations, and see what tweets are occuring there. However, Williams says this is not exactly like "checking in." "We're not looking to duplicate what Foursquare and Gowalla are doing but rather integrate them better into the service," he says. "What we care about is what's happening in those places, and not just where they are." He continues that it's “a way to see where a tweet is coming from but also a way to read all the tweets coming from specific nearby landmarks.”
PREVIOUSLY: At Chirp, the official Twitter Developer Conference, Twitter co-founder Biz Stone, fresh off of blogging  about Twitter's new ad platform  (and the third party app developer backlash) ran the audience through Twitter's humble beginnings, from it's early prototype drawings (below) to its first design (top image) to its impact on earthquakes in Haiti and Chile. The service first began with the tagline: "If you have a cell and can text, you will never be bored again." According to Stone, their main criticism was that the service wasn't useful; their response: "Neither is ice cream." Stone took listeners through the years with flowerly language, describing Twitter users as "a flock of birds in flight," and discussing its breakthroughs at SXSW, in Iran, and even with an American abroad who used Twitter to get "himself out of prison."
Today, as Stone just revealed, Twitter has 175 employees--up from 25 in 2009. And how many registered users? Exactly 105,779,710, growing 1,500% over the past three years. Twitter also receives 300,000 new users per day, and over 180 million unique visitors per month. Most remarkable: 75% of their traffic happens outside of Twitter.com.
Twitter CEO Ev Williams has taken the stage now, taking us through the core priorities of Twitter. He says, "The best thing we can do is grow our user base--grow it by hundreds of millions of new users." There are over 55 million new tweets per day, according to Williams, and over 600 million search queries a day. "Twitter really shines in real-time," he argues, and compares it to other search engines, saying that Twitter provides more current search results than Google.
Williams now turns to Twitter's financial goals. "Revenue is happening this year for Twitter," says Williams. "We have investors that have bought into the long-term vision." He says that its revenue stream will be "organic to Twitter, user-beneficial, and eco-system friendly." More to come on this later, he promises.
Twitter reveals the first ever tweet: "Setting up my Twitter." Doesn't quite have the panache of Alexander Graham Bell.
Stay tuned here for more updates from Chirp -- we'll be updating this post throughout the conference.