Shortly, Twitter should be more profitable than Google.
How Google makes money? More or less, they sell queries. They do not know the right price, so they let the market to figure it out. It works extremely well but they are able to flood someone with ads only about 10-20 times a day.
Twitter, on the other hand, is able to flood with ads all the time. Actually, they are able to push ads, instead of having to wait for a query. Twitter is able to auction with more "vectors", such as location, whole feed, followers etc. They do not have to do any information retrieval over this data, it is already provided with the structure.
Twitter does not have any privacy issues. It is already assumed that nearly everything you post on Twitter is public, so no one is going to screw them for using this. The data posted on Twitter is not sensitive, unlike Facebook.
Also, there is a huge value about the way they receive the data. They have a significant edge over the old web, as they get a lot of things before the whole world. What is even better, they do not have to pull this data, people push it to Twitter. They have data faster and they do not have costs related to crawling the web.
So, if for some reason they do not want flood people with ads, they are also able to auction immediate notifications about queries, the whole stream of tweets, some parts of it. They are able to set the minimum price of each auction so they offset their costs. Everyone focuses on Twitter as a marketing channel but there are many, very profitable, industries that live by the speed, die by the speed.
And do not get me started with the control they have over links posted in Tweets...
EDIT: typos