Tuesday, August 11, 2009

A tale of two URL shorteners

URL shorteners have been around for a long time. Initially they seemed to serve to make it easy for newspapers and magazines to put long links in in a form that their readers could easily type in (for example for YouTube videos, although most pre-date YouTube).

With twitter they have come into their own. Since twitter only lets you have 140 characters, you don't want to post a long url. Services like bit.ly, tinyurl, and so on have seen their usage levels soar.

But not their revenues, as almost all of these services have little or no revenue model. Essentially becoming something used members of a free service like twitter can be a real problem.

This is why the service tr.im has voluntarily shut down. A statement on the site reads:

"tr.im is now in the process of discontinuing service, effective immediately.
Statistics can no longer be considered reliable, or reliably available going forward.
However, all tr.im links will continue to redirect, and will do so until at least December 31, 2009.
Your tweets with tr.im URLs in them will not be affected.

We regret that it came to this, but all of our efforts to avoid it failed.
No business we approached wanted to purchase tr.im for even a minor amount.

There is no way for us to monetize URL shortening -- users won't pay for it -- and we just can't
justify further development since Twitter has all but annointed bit.ly the market winner.
There is simply no point for us to continue operating tr.im, and pay for its upkeep.

We apologize for the disruption and inconvenience this may cause you."

But it doesn't have to be this way. A few days previously a rival service bit.ly announced that it was going to launch a real time news service, mining the popularity of the different links that bit.ly can see being sent around through it's system. It reports that it seems more than a billion clicks a month, so is in an incredibly rich source of data to mine, and they plan to charge marketers to access this information.

General manager Andrew Cohen told Wired:

"What we see are people, and marketers, coming to bit.ly and using it almost as an ad server — running campaigns on Twitter, but becoming interested in the ROI (return on investment) on those campaigns.

If I send out a tweet about dogs versus a tweet about cats, what is my average click rate normalized by the number of followers I have today? Did dogs perform better than cats? Did dogs perform 20 percent better than cats, and if so, if I share a URL about dogs again, has it performed two standard deviations beyond what I would normally expect for sharing a dog-related URL at noon on a Thursday?”

Smart stuff, and being a bit of a data geek I'd love to get my hands on that data. (In fact I can see some of the data, because bit.ly let you see how many clicks a link has, by adding a '+' to the end of the link, for example: http://bit.ly/44u4E+ )

What these two contrasting stories show is that there is still both lots of money to be lost, and (potentially) made in digital media. Bit.ly has the advantage because it is the default shortener of twitter, and has the most volume. tr.im turned into an also ran.

It also shows that to monetise services you need to be imaginative - paid services, premium options, and advertising are not the only options. If bit.ly can get their plan to work the company will be worth a huge amount of money very quickly.

One thing though - with short urls you never know where you're really going to end up. There are companies already set up to send links to mirror pages featuring ads as a way of generating revenue - beware of clicking through on short links if you don't know the person posting them.

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