Twitter is certainly banking on making money, and doing so soon. The company’s chief operating officer Dick Costolo told Reuters he expects no less than “hundreds of advertisers” to start paying for prime real estate on the micro-blogging platform’s by the fourth quarter of this year. A bold prediction, or a lot of hot air?

As we’ve reported, Twitter’s new ad scheme works a lot like a Google search with featured links for brands who pay up. When you search for a topic on Twitter, the Promoted (aka paid for) Tweets will hit the top of the list. Twitter’s Costolo expects the new ads “to generate hundreds of millions of dollars in revenue.”

That’s comforting words for Twitter’s backers. But Twitter still faces competition, particularly from Google and, more recently, Facebook. New research by Sense Internet says that where 80% of advertisers think Facebook is effective for connecting to customers, only 45% of advertisers have the same confidence in Twitter. What’s more, a lot of these surveyed companies said they experienced up to a 200% increase in sales after starting their Facebook ad campaigns, numbers that are bound to attract even the most reticent brands.

Twitter’s ad model hinges less on advertisers at the moment, than it does on us. As we  we reported a few weeks ago, Twitter is widely recognized among the general public, but only a few of us understand it enough to bother with it. To wit, less than 7% of the Internet-going population actually uses Twitter. But then again, the research mentioned above also claims that the Twitter population is “sky-rocketing” (no exact number given) despite its rather “impersonal” nature compared to Facebook. Facebook too though is getting bigger all the time (projected 500 million users in June).

It seems to us then that Twitter execs will be spending these months to convince advertisers it’s a good deal, doing its biggest PR push yet. We’ll let you know when the advertisers start to bite.

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