Because money often interferes with growth, and in any case if your first priority is growth it's best to focus on that rather than bring in secondary or tertiary concerns.
According to a Mashable article in March '09: "The latest numbers from Nielsen Online indicate that Twitter grew 1,382% year-over-year in February, registering a total of just more than 7 million unique visitors in the US for the month."
I'm not sure how much you can interfere with that kind of growth. My point is that people seem to talk easily about monetizing all those users, but nobody seems to be able to give specifics on how to do it.
Even if users don't mind the ads, it can take a depressing amount of time to integrate ads into a site [1]. Assuming you don't just use adsense, each advertiser often has their own way of doing things and will have one-off requirements for how their ads should behave on your site. That's engineering time that could be used to fuel growth by developing features and working on scaling.
[1] I'm speaking from personal experience. For about six months, I worked on nothing but integrating various advertisers' products into justin.tv. Video ad providers are particularly difficult to work with, since it's still quite a young market.
Ads may be their obvious route, but I wonder how much of a turn-off that will be for users. I'm totally rooting for Twitter to be successful, I just wanted to highlight the contrast between this small $5M business actually making money vs. "hot" web companies that may be faddish, and have yet to prove a model to make money, yet get all the press plus $100M investment.
I think it's great that Twitter is focused on only one thing: being the first social network to reach 1Bn users.
I mean, honestly, who gives a shit whether Twitter is making money now or not? Twitter doesn't, their users don't, and their investors don't.
Who else matters in this equation?
The only reason people talk about it is because other people say "Yes, Twitter is big, but how will they make money?" People said the same thing about Google and (some) still say the same thing about Facebook.
Twitter probably won't be the first to 1B users, at 45M plus 1 new user/second currently that will probably be linkedin. Also, pumping huge amounts of cash into things that don't actually have the corresponding cash value is how bubbles form and burst. (reply to jfarmer above)
EDIT: whoever downvoted me shouldn't have. Regardless of your feelings about Twitter, my statement about economic bubbles is correct.
You say bubble, other people say sound investment. If Twitter crumbles because they overreach there will be a thousand startups ready to pick up the pieces.
My problem is not with Twitter per se; as I said I hope they are successful. My concern is that we don't celebrate companies like this where the guy actually makes money enough; instead we focus on things which are more speculative in nature. Sure, facebook and twitter may turn out to reap huge profits in the future, but valuing them at around 1B before they've made more in profit than this little $5M company has done is the same pattern of ignoring cash to actual value that led to the Great Depression, the dot com bust, and this latest housing bust/financial crisis. How many funded web companies still don't make $1M yearly in profit?
