Does “Sign In with Twitter” Make Sense Without an Web Ad Play?

I’m starting to see the “Sign in with Twitter” button in more places on the web. I’m still trying to figure out what the bigger picture plan is for this service. To me, it looks very similar to Facebook Connect – it’s a simplified way to log into 3rd party sites without having to create a brand new account. In both cases, a user gets the benefit of a more seamless registration process and the site gets the benefit of having access to a user’s social graph, whether it’s used to bootstrap a social network or to publish to a newsfeed.

I continue to be a strong believer that the ultimate path for Facebook Connect is to have that service paired with an ad network that works off Facebook – users who sign in with FB connect on 3rd party websites will see ads that are not only based on the context of the page but on their behavior and preferences from activities on Facebook. Facebook already has a lucrative display ad business on its own site and it seems pretty clear to me that advertising is going to be a core, if not the primary, revenue stream for the company. Provided that is the case, I understand the benefits of Facebook pushing Facebook Connect broadly as a precursor to an off-Facebook ad product.

So what’s the development path for “Sign in with Twitter” at the end of the day? Twitter still hasn’t unveiled a business model, so it’s hard to figure out how it fits into the big picture. Maybe it isn’t part of a grand plan. But the more I use Twitter, the more I see it as a great distribution / publishing platform. If Twitter continues to go down the road of focusing on their platform as a way to distribute and broadcast short-form content, I can see their 3rd party sign-in service as a way to turbocharge the distribution of content on news, blogs, and e-commerce sites. But I’m not sure what that ultimately does for Twitter.

The one thing that does make sense to me, though, is that Twitter is working as a distribution source for blogs and news sites and I suspect they would embrace and welcome a lightweight service that helps them a) know more about who some of the people are who enjoy consuming and distributing their content and b) makes it much easier for them to get more reach for the things they produce.

What do you think? Any thoughts on how “Sign in with Twitter” fits into the big picture for Twitter?