Timing is everything and, sometimes, very awkward.

Today at its Redmond, Wash., campus, Microsoft is hosting a splashy online “marketing leadership summit” titled “Imagine 2011″–a gathering of top marketing execs from across the globe, most of whom are advertising clients of its online division.

Also today: Its longtime head of global marketing, Mich Mathews, announced her departure–to the surprise of many Microsoft execs here, in fact–via a report in Ad Age.

In the article, she said she had told execs at Microsoft just last night.

Mathews, who is probably Microsoft’s top woman executive, has been at the software giant for a dog’s age–22 years. (BoomTown met the sharp-witted and often pointed exec in the early 1990s, when she was in charge of the PR operations for the company.)

As SVP of Microsoft’s Central Marketing Group, Mathews oversees a $1 billion budget for Microsoft products such as Windows, Xbox , Window Phone 7 and its Bing search service.

While Microsoft will be conducting a global search for a replacement, several sources said the most obvious internal candidate for the job is Yusuf Mehdi, who is SVP for its Online Audience Business.

He leads global product management, strategic partnerships, business development and U.S. marketing execution for the unit.

Another strong internal possibility: Chris Capossela, who just left his job as SVP of the Microsoft Business division for unspecified duties around social initiatives. He had a similar job to Mehdi’s, with key marketing duties.

Attendees at the Imagine event were buzzing about the Mathews news, taking some focus off the program, which included an opening speech by CEO Steve Ballmer.

Ballmer did not mention Mathews onstage, which was a by-the-book overview of its online ad offerings.

Another sticky situation for Microsoft: The Imagine event was organized by another top woman exec at Microsoft, global ad sales head Carolyn Everson.

But, she left the company in mid-February after only six months, for essentially the same job at Microsoft partner Facebook.

Since then Microsoft and Facebook have been wrangling over the talent raid, including Microsoft even considering legal action to block the move.

(In yet another unrelated embarrassing situation–here’s an excerpt from a memoir by Microsoft co-founder Paul Allen, in which he alleges co-founder Bill Gates tried to shanghai him out of shares when he was sick with cancer.)

Like I said: Awkward!

Today, All Things Digital made it onto Ad Age’s Digital A-List, which also includes Groupon, Buddy Media and Virgin America.

BoomTown loves Virgin America’s digital stuff (plus the hip food) .

Actually, Ad Age’s Nat Ives was very nice to us too, nailing what we’re about:

“All Things D has become a particular sort of powerhouse in the overheated space devoted to tech news. It’s part of Dow Jones, so it’s got that gravitas. But it’s got the speed and humor of a blog.”

Yes, quick and funny and very heavy–that pretty much sums up ATD.

You can read it all here.

So here’s a new one: Same cool stunts (to my eyes, at least). More exotic locations. And it looks like it will be a hit, too. Helped by a push from Boing Boing, it’s gathered more than two million views in the last week.

And, as Ad Age’s Michael Learmonth points out, it’s also an ad, paid for by Red Bull.

That won’t be entirely clear to most viewers, since the words “Red Bull” don’t show up until the end of the seven-minute-plus clip. And also because the folks at Google’s YouTube have plastered the video with overlay ads for products that are not Red Bull’s.

But the Red Bull people are apparently okay with that, since letting Google run an ad on your video is an opt-in decision.

Indulge yourself in a tiny bit of time travel here and check out this video, a condensed version of Costolo’s interview with Ad Age editor Abbey Klaassen from last week. This was when Costolo was still technically COO, and not CEO, but that’s not relevant here. The clip is well worth watching if you want to get a good sense of where Twitter thinks it’s at when it comes to ads.

And it gives you a good sense of where Twitter think it’s going, period. Check out the comps that Costolo throws out when he talks about his company: YouTube, Google (GOOG), Facebook. That makes plenty of sense–that’s why investors have put a $1 billion value on the company–but it also shows you how far the company has to go.

Twitter has quietly been reaching out to marketers about its new ad platform for a few months, but now it’s a full-fledged marketing blitz. The messaging service rolled out its ad strategy to the press last night; today it’s going directly to the ad industry, via COO Dick Costolo’s presentation at Ad Age’s Digital Conference.

I’m not sure how much more Costolo will reveal that Twitter hasn’t put out already–or may be waiting to talk about at tomorrow’s Chirp conference. But since I’m here I’ll liveblog it anyway.

Liveblog

Costolo says he has been waiting five or six months to give this presentation. It’s time to walk through the rollout, he adds, making note of his “fascinating nontraditional” prediction last fall.

He explains the Twitter ecosystem. The ad platform has to go everywhere, not just to Twitter.com. He refuses to call the ads, “ads.” They’re “just tweets.”

“Promoted tweets,” that is.

He walks through the @hashtagtees example.

There’s a menu from which ad buyers can pick search terms and associate them with specific tweets they’ve already published.

Promoted tweets look and act like regular tweets except that they’re labeled as promotions and stay at the top of the Twitterstream.

A promoted tweet “combines earned media and paid media in one space,” Costolo says.

“Earned” media are free, Costolo reminds the audience. That is, if people retweet your paid tweet, there’s no charge additional charge.

The pitch continues: Ads are “real time,” and so are analytics–you can see how ads are performing second-by-second.

Twitter will start with Twitter.com search. That’s phase one. The plan will roll out more broadly, but the company is doing it this way because it wants a “thoughtful, user-centric approach” to figuring it out. “We will quickly expand into syndication…all of our syndication partners.” And here, Costolo specifically mentions UberTwitter in the list of partners.

Important: Twitter will definitely expand into the regular timeline at some point. That is, you will be getting ads in your stream whether you search or not. Ad-free Twitter is over.

Costolo talks about the “resonance” metric Twitter will use to figure out which promoted tweets show up and where.

Each ad partner will see a scoreboard with different metrics: Retweets, @replies, #tag click, avatar clicks, link clicks, views after RT.

Advertisers won’t pay for ads that don’t resonate with users.

Next, Costolo describes communication on Twitter as both “one to many” and as a “real-time interest graph.”

Pricing will start as CPM. Twitter is doing this because it doesn’t know how to correlate “resonance” with value yet. As the company figures this out, it will move to a pricing model based on ROI.

Here comes Porter Gale, VP of marketing for Virgin America, a launch partner. She notes that @jack is flying VA right now.

[You're not missing anything here.]

Um, here’s a free ad for two-for-one tickets on Virgin. Don’t really follow it but sure you can figure it out if you’d like.

And here’s Ellen Stone, SVP of marketing at Bravo.

She is also excited!

[You're not missing anything here, either.]

Stone describes some sort of live, real-time convergence between shows broadcast and users’ tweets. Makes my head hurt. Hope it doesn’t pop up during “Top Chef.”

Back to Costolo: More monetization coming. Commercial accounts coming after promoted tweets will “feather into this platform very very nicely.” One dashboard will manage both products.

Q&A

Will tweets be syndicated to Google (GOOG), Yahoo (YHOO), and other partners that take the stream?
Costolo says yes, without mentioning any specific search engine or media pub.

Will there be revenue-sharing with publishers and bloggers?
Yes, with developers and publishers. Costolo says Twitter will talk about this at its Chirp conference and focus on the syndication piece there. Revenue sharing will be “very transparent,” he adds.

Early reaction from consumers?
Yes, Twitter is getting a “wait and see,” Costolo notes. [From whom? Who's seen it?] The company will take its “learnings” from search and go forward. Twitter ads should be live and running now.

What CPM are you charging?
Twitter is playing around with different numbers, trying to figure it out. When a term is owned or created by a client, like Virgin America, should it have “rights” to that hashtag, whereby no one can outbid it? Some hashtags only have value at certain times. Like “Super Bowl,” which is only useful for a couple hours in the year. So we have to play around and test different kinds of pricing. “We don’t know the answer to that yet.”

What kind of reactions are you looking for from users?
Costolo says Twitter is looking to see whether people click or interact with ads and paying attention to the tenor of reaction: Positive or negative, etc. Think about the iPad launch this month. People were having battery issues. Someone could have jumped in in real time and bought a promoted tweet that dealt with that. Twitter’s hope is that when people see these, they’ll get why they work.

Please talk about search volume.
“Massive. It’s huge.” Will talk about hashtags tomorrow. But on Twitter.com, it’s a small piece of traffic. So we’re not maximizing revenue now. We’re figuring it out.

How will location work with ads?
“We think significantly.” There are lots of opportunities down the road. As this gets more sophisticated, will see opps for small and big business.

Will marketers be able to get resonance scores for companies that aren’t using promoted tweets?
Not at first. But possibly.

Will you share revenue with TweetDeck, etc.?
Yes. We’ll talk about this tomorrow so we can save something for those guys. Revenue-sharing will be very transparent. Costolo name-checks Iain Dodsworth of TweetDeck and Loïc Le Meur at Seesmic.

Finished up. I will have some questions for Costolo myself, a little later this afternoon.

Starting today, the company will run ads–it prefers the term “promoted tweets”–on its Twitter.com site. Down the road, the ads will show up in the third-party software many Twitter users rely on to access the service.

As I reported in March, Twitter is rolling out the service, modeled on Google’s (GOOG) AdWords, in conjunction with a presentation COO Dick Costolo is giving at an Ad Age conference in New York today. Topic of his keynote address: “How brands can work with Twitter.”

And as I reported in February, Twitter’s ads will initially show up only in search results. That’s a tactic that both limits their reach and the possibility that they’ll upset users who are used to an ad-free stream.

But depending on which report you read, Twitter is debating whether to move the ads into users’ regular streams (Ad Age) or has already decided to do so (New York Times).

The latter makes a lot more sense to me: If Twitter only showed ads to searchers, it may have a very difficult time reaching most users.

That’s in part because Twitter’s search results are pretty lousy–if you don’t believe me, go ahead and try it yourself. And it’s in part because Twitter isn’t a search engine; it’s a media company that will make money by rounding up eyeballs and showing them marketing messages.

That’s an important distinction, and one that Twitter itself has been loath to acknowledge. But you can see the company grudgingly accepting that reality now as it moves to control more of its platform.

At the same time, Twitter needs the biggest possible audience for its ads. Which means it has to court the ecosystem of third-party developers it has encouraged over the years so that they’ll run the ads as well.

That romancing got a lot more difficult last week when the company scared the beejebus out of its developers. And it got more difficult yesterday with the launch of TweetUp, a rival ad platform backed by serious players.

So Twitter’s team has a lot of selling to do. That effort starts with advertisers in New York today, then switches to programmers in San Francisco on Wednesday. We’ll be covering both pitches, so stay tuned.

This time it’s going to be different. That’s because Microsoft (MSFT) is paying to make it so. The company has teamed up with Fox to sponsor a “Family Guy” special built around Windows 7. The show, dubbed “Family Guy Presents: Seth & Alex’s Almost Live Comedy Show,” after creator Seth MacFarlane and voice talent Alex Borstein, will air Sunday, Nov. 8, at 8:30 pm, EST and PST.

The new episode will be free of commercial breaks but presumably rife with “clever” references to Windows. Microsoft agencies Universal McCann and Crispin, Porter and Bogusky, which were tapped to weave the company’s marketing messages into the program, will make sure of that.

“You’ll see us deeply integrated into the content,” Gayle Troberman, general manager of consumer engagement and advertising at Microsoft, told Ad Age. “You’ll hear a lot about how Windows 7 can help you simplify your PC–it’s simple, fast and easy to use.”

Sounds…hysterical.

Incidentally, it’s worth noting that this isn’t the first time MacFarlane has inked an advertising deal with a tech company. He’s currently working with Google (GOOG) on a project called “Seth MacFarlane’s Cavalcade of Cartoon Comedy,” which involves humorous animated shorts with built-in advertisements syndicated through the search giant’s AdSense advertising system.

Estimates vary widely, but they’re all bad–as we thought they would be. Variety says ad agencies think the four broadcast networks–News Corp.’s (NWS) Fox, Disney’s (DIS) ABC, GE’s (GE) NBC and CBS (CBS)–plus the pint-sized CW, may have seen sales drop by 10 percent to 12 percent compared to last year. Ad Age thinks the decline could by as much as 15 percent. Mediaweek says sales are down a staggering 22 percent.

The other bit of consistency is the explanation for the drop, which is two-pronged: Sales are down both because the economy is bad and because the networks are offering less inventory than they normally would. They’re holding back lots of their spots in hopes of selling them at higher prices later in the year, presumably when the economy comes roaring back.

I’ll let bigger brains than mine handicap the odds of that happening (but for the record, you can color me skeptical). In the meantime, let’s see what depressed TV ad prices do to prices for Web video ads.