Like a new dance club that just opened its doors, Twitter is the place to be in the social networking scene. Started in 2006 by the podcasting company Odeo, its relative simplicity and ease of use has caused it to quickly outpace its competitors and become the epicenter of the internet. From celebrities to businesses to everyday people, everyone, it seems, has become hooked on tweeting.

With popularity comes opportunity as both individuals and businesses are finding out. Let’s face it. Any place where there is a large gathering of people is a place where you can find a way to make money. Whether you are looking to earn a little pocket change or generate a large income stream, Twitter can help you achieve your financial goals.

There are two ways to make money from Twitter; by directly advertising your products and services or by directly monetizing your Twitter profile. Both ways require that that you approach the social networking service with the correct mindset in order to use it effectively. Social networking is a balance of giving and taking. If you jump on Twitter with the intention of only reaping a harvest without sowing any seeds you will quickly crash and burn.

Would you go to a party and immediately start urging people to buy from you? Probably not. Most likely, you would first strike up a conversation and lead in to talking about your product. It is the same thing with Twitter. To be successful, you must first engage your fellow Tweeters before selling to them.

You do this by building a positive reputation for yourself on Twitter by providing quality content. Quality content is defined as content that provides value to the reader. That value can come in the form of entertainment, information or a combination of both. By producing content that provides value, you will develop a following of people interested in what you have to say. After all, it does you no good to talk about your product if no one is listening. That’s like giving a speech to an empty auditorium.

After you have built up a following, you can then advertise on Twitter using several techniques. The best way is to use Twitter to redirect your followers to your website. An effective way of doing this is by posting a provocative Tweet that entices the reader to click a link you provide.

An example of a compelling tweet would be something like: ‘Here are Ten Ways You Can Make Money Online’. You would then post the link to the article on your website. This gets people to your website where you can then sell to them.

This method of advertising works best if you have a blog that you update on a regular basis. However you can also tweet about the products and services you have available and post a link to your sales page. Just be sure that the link goes where you promised it would. If you try to pull a bait and switch people will label you a spammer and down goes your reputation.

To add a link to your Twitter tweets, you’ll want to use a url shortening service such as Tinyurl or Bitly. These services condense long links into a few characters which will give you more space in your tweet for your message. To use them, all you do is copy and paste your link into the appropriate box and then click ‘Shorten’. You will then get a new url that you can paste in your tweet.

Another great way to advertise on Twitter is to get your followers to do it for you. You can use incentives, such as cash or prizes, to encourage people to post about you. For example, a company called Moonfruit enticed Tweeters to post about their company by giving an entry to win a laptop to each person who posted on Twitter. The requirement was they had to use a hashtag with the company’s name in it (i.e. #moonfruit). This generated so much buzz around the company that the hashtag made it into the top ten topics on Twitter and earned them top of mind awareness about their business.

Last but not least, you can modify your profile background to display your marketing message. Many Tweeters have used the extra space to display a longer biography of themselves as well as links to their websites. There are many tutorials online that will show you how to create a custom background image for your Twitter profile.