Comments for Look Out TinyURL; Bit.ly Gets Hot Silicon Valley Cash

Look Out TinyURL; Bit.ly Gets Hot Silicon Valley Cash

2009-03-30T18:42:44Z

Link shortening services are so common you can't throw a stone online without hitting one, but TinyURL is the undisputed champ. It's one of the oldest, its name says what it does and despite repeated outages - its downtime is small enough that millions of people keep using it.

TinyURL has also allowed incomprehensible amounts of value, both in terms of technology and in terms of money, to sit on the table unclaimed. For years. Now a group of some of the web's hottest investors are betting a few million dollars that a smart TinyURL competitor called Bit.ly can take advantage of being the conduit through which millions of people visit sites of interest to them.

]]> Today Bit.ly announced that it has raised about $2 million in its first round of funding. The round was led by Tim O'Reilly's venture fund and included money from Mitch Kapor (the inventor of Lotus), Jeff Clavier (portfolio), Ron Conway (early Google investor), the Accelerator Group and Howard Lindzon's new fund Social Leverage. All of those names are some of the hottest in the startup scene and all the companies in those various portfolios will now have a close business connection to Bit.ly.

We reviewed Bit.ly when the project launched last July and urged readers to use this service to shorten their long links instead of other services like TinyURL. Why do we care what service people use? Because we're fans of innovation and Bit.ly is aiming to be a platform for innovation like TinyURL should have been. If web 2.0 is about democratizing publishing, the next step is machine leveraging all the resulting data.

The Bit.ly Magic

What does Bit.ly do that's so special? They use all the data they see and make it available to third party developers who want to build on top of it. They keep track of the clickthrough numbers and can tell you what the hottest links on the web are at any time. See this @bitlynow Twitter account for one display of that information. Bit.ly says it resolved 20 million distinct URLs last week. That's the beginning of a really large database.

Bit.ly also uses Reuters Calais to extract semantic terms out of the pages that shortcuts are created to. That's valuable information. Want to see the most popular web pages that talk about Dancing With The Stars, or the Federal Stimulus Package, or some other topic, in the last 30 minutes? Somebody wants to, you'd better believe, and that's the kind of real-time information that the Bit.ly API aims to make available. (Disclosure: Calais is an RWW sponsor.)

We've had some concerns about the clickthrough numbers that Bit.ly has reported but the company says they are going through a list of reporting sources that give them problems and eliminating them one at a time. The company says it is now reporting real-time traffic stats that are within 10% of what Google Analytics reports much later. We've been watching the numbers improve in accuracy when it comes to our numbers and can confirm that they are getting much better.

A number of people have looked at today's news and thought it was ridiculous that a link shortening business could raise $2 million in funding. We don't think it's ridiculous at all. Show us a service that can report in real time how many people are visiting millions of pages around the web and what those pages are about, that exposes that data in an API, and we'll show you a platform we're very excited to see work.

Comment from Cesar on 2009-03-30

2009-03-30T19:50:42Z

This space is going to get really interesting once Kevin Rose releases his URL Shortening service. Can't wait to see how this plays out in the coming months.

Comment from Steven Walling on 2009-03-30

2009-03-30T19:56:10Z

I don't use bit.ly for the exact same reason I wouldn't pay micro-payments for content: it doesn't solve any problems for me.

The point of a URL shortening service is to get the shortest possible URL. That's the problem that this model solves for me and other people. Thus, I use the service that does the best job of this: is.gd. If I really need alternative functionality (like vanity URLs), I'll use something else.

So while I think bit.ly's efforts are great for people who really need metrics about their links (*cough* like bloggers), it doesn't do a damn bit of good for someone who just needs the shortest possible link to send to their friends, family and coworkers.

Comment from GraemeThickins on 2009-03-30

2009-03-30T20:00:10Z

so, this is one of the recent investments Jeff Clavier did that he couldn't tell me about when I interviewed him a few weeks ago :-)

Comment from Marshall Kirkpatrick on 2009-03-30

2009-03-30T20:01:36Z

Steven, as a frequent contributor to Wikipedia, I would think you'd be excited about the fact that this company is helping power the semantic indexing of content throughout the web at large. This API could be of great benefit to the web at large. It's not just about metrics. Is.gd and other services see that you think this page is important, they have the opportunity to see what the page is about and they see how many other people click through your link to read it as well - yet they do nothing with that data. Not for themselves and not for anyone else. That seems like a tragic waste of resources.

Comment from Todd on 2009-03-30

2009-03-30T20:10:11Z

Use http://icanhaz.com and get a free laugh if every failed attempt.

...but seriously, I have concerns about all the URL shortening companies long ability to preserve the permalinks.

Try clicking on an old link from Pownce lately?

Comment from Miles on 2009-03-30

2009-03-30T20:15:48Z

I use ubiquity plug in for Firefox. It has a 'tinyurl' command... thus I will use tinyurl. Easy (don't make me think).

Comment from heri on 2009-03-30

2009-03-30T20:15:56Z

I think you should have compared it to cli.gs which delivers the same service (API, analytics, geo-localized information, etc.) ?

Comment from Vasudev Ram on 2009-03-30

2009-03-30T20:22:42Z

Great analysis and article. I think the investment makes sense. Of course they (i.e. bit.ly et al) won't be able to get data about links that are not passed through URL-shortening services, but the data they do get should still be huge, and will probably increase over time as more people start using these services, and as (maybe) other web services start using these shortening services automagically, as Twitter does with TinyURL - it calls TinyURl to shorten long URLs in tweets.

- Vasudev

Comment from Steven Walling on 2009-03-30

2009-03-30T20:31:59Z

Marshall, you're right that bit.ly is awesome for what they're doing with the data at their disposal. But Wikipedia didn't get where it is today by making the semantic indexing of the web a core part of the mission. It did so by building a useful encyclopedia. Everything else is secondary, and the same is true for URL shorteners. Focus on one thing, and do it well.

Appealing to my higher sense of respect for smart use of data (even if it will ultimately serve me in the long run), still doesn't negate the fact that in the short run — no pun intended — people are likely to prefer the service that gets them the smallest URL in the fastest time.

Comment from homepage on 2009-03-30

2009-03-30T20:56:42Z

Can someone please explain how to make money off this service? I don't get it and I see tons of these services on killerstartups all the time. Try the best home page

Comment from Ross on 2009-03-30

2009-03-30T21:05:25Z

I remain unconvinced - the only advantage of URL shortening is their usage in text-limited spaces like twitter.

For this you trade human-readability, the inability to foresee the actual destination (I frequently wind up viewing content I've already seen), the ability to remember the URL for later use, and a dependency on another middle-man - not really the point of a URL.

I fail to see how bit.ly adds any semantic data of value beyond that we would have already through analyzing the usage of standard URLs to destinations in the 'wild' as opposed to through their parsing.

I', worried that URL shortening services are ultimately dangerous to the wider semantic needs of the web.

Comment from vicaya on 2009-03-30

2009-03-30T21:24:17Z

Extracting terms on destination page is completely useless to url creators. I'd love see terms on referrer pages. I personally prefer tr.im for shorter names and better usability.

Comment from Rebecca on 2009-03-30

2009-03-30T21:57:14Z

I've been using bit.ly since (at least) last Fall. The thing I love about it is it keeps track of every url you've shortened. I make reference posts to many different sites that I read. Oftentimes I'm contacted hours or days later - where did you find so-and-so? So easy to find it on my bit.ly log.

Comment from ledil on 2009-03-30

2009-03-30T22:01:59Z

@Cesar: do you have more information about Kevin Rose URL Shortening service ?

Comment from Kiran Patchigolla on 2009-03-30

2009-03-30T22:19:11Z

I started with tinyurl but now I use bit.ly all the time. Its truly awesome what they are doing with the data, how they track conversations on twitter etc.

Comment from Edwin Khodabakchian on 2009-03-30

2009-03-30T22:52:07Z

Interesting move.

On the positive side, if they can solve the click-through spam problem and identify how many of the requests are automated versus real users, then they can create value.

On the negative side, this is something twitter should have built into their platform so if twitter decides to not acquire them it could be really hard on the long run.

Comment from AW on 2009-03-30

2009-03-31T00:29:46Z

Agree that statistics in Bit.ly are very helpful and one distinguishing factor why I use the service instead of countless other url shortening services.

@ledil
Kevin talked about DIGG's coming launch - url shortening service - in TWiT episode 187. Not sure if you can find more info elsewhere.

Comment from David MacKay on 2009-03-30

2009-03-31T00:49:10Z

bit.ly offers a great commodity service for text-limited services such as Twitter. What happens when those text limitations are removed? Their API won't help them much then.

(Aside: Does anyone think Twitter will maintain the 140 character limit forever?)

I think that link analysis is better approached from the other direction like http://backtweets.com (from the http://www.backtype.com people).

Their API could use some work (http://backtweets.com/api) but overall I prefer this approach. It may not be exactly realtime but should be close enough.

Comment from rates on 2009-03-30

2009-03-31T02:38:44Z

If i can have a short domain like x.us, how would that be?

Comment from k on 2009-03-30

2009-03-31T06:43:10Z

Yeah, what the heck? Twitter could any day change the 140 limit to a limit excluding anything inside an tag. Then what?

Comment from steve on 2009-03-31

2009-03-31T07:39:52Z

ziprl.com is a really cool url shortener. You can register for free and have full control over the destination of your urls, you can also password protect your links and links will never expire.

Comment from Ranjit Padmanabhan on 2009-03-31

2009-04-01T01:37:55Z

I like the fact that bit.ly has done so much to squeeze value (analytics, entity extraction) from URL shortening.

However one issue that comes up is that these URLs are opaque and give no hint of the destination. Readers are hesitant (and rightly so) to click on such links. To overcome this, the author adds explanatory anchor text, limiting the utility of the shortening in the first place!

Comment from Allen Weiss on 2009-04-06

2009-04-06T18:31:16Z

So, when people say that this is a great way to see in real time what sites people are going to, what are we supposed to do with that information? I could see this is valuable if, say, most of the urls were showing millions of hits, but when I look at it, it seems the hottest urls have 3000 or so hits..certainly nothing that would indicate a random sample that could be generalized to a population nor even anything that, say, a marketer could use. It is great for identifying purely transient behavior..but what we do with that?

Anyway, before saying this is more valuable than web analytics, we might think about how web analytics might be a bit slower but at least can follow the traffic all the way to, say, the cash register.

Comment from Yogindernath on 2009-05-15

2009-05-15T07:37:11Z

Even I have switched on to bit.ly instead of tinyurl and its a great tool to use. Cheerzzzzzzz

Comment from cephe kaplama on 2009-08-12

2009-08-12T14:17:16Z

Great post.thanks a lot.

Comment from Andreas - Linknami on 2009-10-07

2009-10-07T17:39:12Z

As I see it, if url shortening services suddenly generate huge money, services like twitter could create their own url shortening service with relatively low cost and plugging in millions of users instantly, thus effectively hurting bit.ly and their investors.

Comment from Keeton on 2009-10-26

2009-10-26T19:59:38Z

I think the biggest issue I have with the bit.ly business model is that its customers aren't the end users themselves. This moves the focus of their business away from the individuals who rely on the service and are helping to build it.