Twitter Inc. (TWTR - Analyst Report) might find it difficult to compete with Facebook Inc. (FB - Analyst Report) as an advertising platform, but it is discovering newer ways to increase ad revenues. The company has reportedly started a new advertising distribution program to display tweet-based ads, known as Promoted Tweets, on third-party mobile apps and websites. Following the news, Twitter’s shares gained over 6%.

Media reports also say that the company has formed its first partnerships with newsreader mobile app Flipboard and Yahoo! Inc.’s (YHOO - Analyst Report) Yahoo Japan website. As per Bloomberg, the company will share ad revenues with these companies. However, the financial terms of the deal remain under the wraps.

With this advertisement strategy, the social media company plans to rope in non-Twitter users as well. The company will now be able to generate ad revenues from clicks on mobile apps and websites which have a live Twitter stream and thereby lower its dependence on Twitter users. Though this marketing strategy will not boost Twitter’s user base, it will benefit from the additional ads placed on websites and apps.

Over the past few months, Twitter has been seeing a slowdown in its user growth rate. Attracting more advertising revenues might be difficult if the user growth rate does not improve, especially considering the significant competition from Facebook, Yahoo and market leader, Google, Inc. (GOOGL - Analyst Report).

At the end of the third quarter of 2014, Twitter had about 284 million active users — approximately one-fifth of Facebook’s user base. However, according to Bloomberg, during the same time frame, tweets were seen 185 billion times on websites not owned by Twitter. Therefore, monetizing these views could help generate additional revenue for Twitter and alleviate some of the pressure on the stock that has resulted from its sluggish user growth rate.

Twitter expects to diversify its revenue stream and increase sales from $665 million in 2013 to $14 billion by 2024. However, it currently has only 60,000 advertisers as against Facebook's 1.5 million, according to reports. As a result, it plans to increase the share of ads that appear on users’ timelines to 5% and show ads to 500 million non-Twitter users targeted through live streaming of Tweets.

The Zacks Rank #3 (Hold) company is scheduled to report fourth-quarter 2014 results after the market closes on Feb 5.