
Ask HN: How are url shorteners making money? - melvinram
I've seen a ton of url shorteners (like tinyurl.com) out there but haven't seen any real business model behind them... but they seem to survive. Are they doing it from donations, advertising or do they have other techniques?
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mikeyur
They don't. To be honest the majority of url shorteners don't make any money
at all. I know because I run one. <http://urli.ca>

It costs me nothing to run because it uses next to no resources on a server
that I already pay for and I got the domain for free.

//Sidenote, if anyone is interested in using the service, we have a really
simple api (as all the services do) <http://urli.ca/api> _note: the urls auto-
increment (ie. ab/ac/ad/ etc.)_

~~~
benhoyt
I run DecentURL.com, and have had basically the same experience. I made a few
dollars off some "$7 premium services" for a while, but recently stopped
running those as there just wasn't enough demand. Not that I made "selling"
DecentURL a priority -- so I shouldn't say too much.

I'm turned off the ads-during-the-redirect thing, but I can see where it might
be an effective money-maker.

I like what cli.gs is doing.

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pierrefar
I think I can answer this one, as I own the URL shortener Cligs (
<http://cli.gs/> ).

There are two main approaches to running a URL shortener: a "basic" approach
that simply does a redirect and a more advanced approach with value added
services (like analytics).

A basic redirect comes in two types:

1\. A proper HTTP redirect (a 30x code, of which only 301 is of proven SEO
value).

2.a. A cloaked redirect in which you redirect to a page on the shortening
service's website that displays two frames with one frame being the
destination page and the other frame being a page you control.

2.b. An interstial redirect in which the initial landing is a page on the
service's website that "refreshes" after a few seconds to the destination.

If you do option 1, then you can't make money off the redirects. You can try
to make money off the people using your site. If you look at tinyurl.com,
that's exactly what they do: find the AdSense block on the right hand side
edge of the site.

Both of options 2 offer you a real chance to display advertising. Adjix does
that and I have no idea about the kind of revenue they're seeing, but you can
see their payout rates at <http://web.adjix.com/AdjixLinkerInfo.html> .

Option 2b is very interesting but the most annoying for the user IMHO. Linkbee
allows you put interstial ads (see <http://www.linkbee.com/create.php> ).

The value add services on top of redirection are very valuable. There are two
kinds:

a. Services that add value to the short URL creator (i.e. the service user). A
great example is analytics which tells you a lot about who's clicking through.
Competing on analytics is an effective business strategy ;) There are other
kinds of value add services, some of which tie back to options 2a and 2b above
(i.e. get the user to earn money from their links).

b. Services that are unrelated to URL shortening per se, but are valuable.
I've seen a few comments in this thread about the value of the data gained
from tracking traffic. I'll leave this one to your imagination - run wild!

There is a third way to make money: white-label services. I won't explain the
business logic behind this, so I'll just point you to my recent announcement
on the Cligs blog: <http://cli.gs/MvDp1s> . Cligs is offering for-pay fully
branded short URLs with the analytics built right in. I know of at least one
other service that will launch with a similar product soon (they're in
testing!).

So how can you make money? It's a very competitive market, and the cost of
entry is tiny, the user loyalty is almost non-existent, and the traffic can be
huge requiring good service architecture. My point from the above is that you
will be able to make money as there are ways to create value for your users
you can charge for, but expect to get a few bruises on the way.

Finally, a personal note: It's a great market to learn business skills in
because it's so competitive and the popular services are run by some really
smart people. Can you really value the lessons you learn from competing in
this market? It beats any MBA you care to point to.

And yes, you should use Cligs as it's the best around: <http://cli.gs/> :)

~~~
melvinram
Thanks Pierre for your insightful & open response.

I was considering building a business-class url shortener this week (mostly to
learn Metal which comes with Rails 2.3 & Sinatra) and what I had in mind was
something very similar to cligs. I was thinking of monetizing it exactly the
same way with analytics. Looks like you guys have done a fantastic job with
it. Congrats on some solid execution!

~~~
pierrefar
Thanks :) There is a lot more coming with Cligs soon that will enable me to
roll out services to compete more aggressively or respond faster. As I said,
it's a competitive market!

But the existence of Cligs or the many other great (and some not so good)
alternatives is no reason that you shouldn't create your own. It's a matter of
what you want from the project and how it fits with your business/life/CV
strategy.

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thorax
They can make some money indirectly. As background, we made
<http://tinyarro.ws>.

For our service, we make money indirectly by mentioning our other
services/sites as friendly as possible. We've seen stellar response from that.

It helps that our URL shrinker is new/cute/silly and something people like to
show-off on Twitter "the shortest URLs on earth".

But our plan isn't to make any money off of the URL shrinking-- it's simply a
toy we want to share because it's a really inexpensive project and a good way
to promote our other sites.

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cperciva
I understand that some of them make money by inserting their IDs into referral
links.

~~~
melvinram
hmm... that seems shady... unless they make that clear ahead of time.

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hardik
I think there is a huge indirect value for the owners to be derived from the
data and trends it shows.

~~~
Alex3917
Correct, bit.ly knows all the most popular links on Twitter in real time. This
is worth a ton, or at least it could be.

~~~
davidw
To who? How do you package that up and sell it to someone?

~~~
eddycole
Think: pulling that data into a techmeme.com style aggregator/ranking site for
the most popular urls people are linking to. Imagine how dynamic it would be -
things that got linked to the most would percolate up to the top. you could
watch in near real time as news breaks and gains traction.

I've had a service like this in mind for a while and haven't pulled the
trigger because I'm a chronic procrastinator.

~~~
davidw
That's a cool idea. However, it's still basically an advertising business
unless you're charging for access to that site. And all of a sudden you have
introduced a big incentive for people to spam/game your service.

I guess what I'm getting at is... some data is _valuable_ , but doesn't, at
least to ignorant me, seem to have a _market_ for it.

(Edit: BTW, I'd be happy to be proven wrong... for instance, I have this site
where the data might be worth something, and the ads aren't worth much:

<http://shoplist.dedasys.com/> )

~~~
kortina
There's an important distinction to make between "advertising business" and
"data business." Data can be useful for advertising, but can also be useful
for tons of other stuff--news, filtering, etc.

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silversun
I am awfully new to this game, but I do recall seeing a url shortener which
enabled additional tracking to the initiating user. For example, showing the
time distribution of the clicks along with originating sites. I may be
stretching this a bit far, but just for the heck of it, if I wanted to figure
out which social networking website had a larger pull for me in distributing
information, this type of service would allow me to do that. (don't ask me
why? :) )

The way I would build a business model around a URL shortener would be through
those types of value add services which would draw users back to the site (ad-
revenue, or potentially in-depth "pay" analytics), in addition to the already-
mentioned resultant data insights.

~~~
Jem
> I do recall seeing a url shortener which enabled additional tracking to the
> initiating user

I think you mean <http://cli.gs> ? :)

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peterbraden
well an evil strategy I wouldn't rule out is to make sure that you have loads
of links in your system - you now own these links- then after a while insert
an advertised page into the flow after a user clicks on one of the links.

wouldn't be surprised if some of the shorteners start doing this at some
point.

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lazyant
I don't know if I have seen it or not: is there a kind of the opposite
service?; a 'de-obfuscator' that takes a meaningless url like
someblog.com?p=245 or one of the long corporate url full of numbers and
translates it into abetterurl.com/someblog/the_title_of_the_article ?

I know because of SEO a lot of urls are now more human readable but it wold be
an interesting idea if it hasn't been done yet (too lazy to google).

~~~
muitocomplicado
I thought about the same thing the other day, because url shorteners are
really only useful for applications like Twitter or Mobile devices where size
matters, but for anywhere else a more readable URL is much more useful if the
destination website doesn't have it already.

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rlm
I have seen some url-shorteners offer paid analytics packages for magazines
etc., that use the service in their articles.

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z3r0p4r4d0x
I don't know about most of them, but since Twitter is gaining more people with
each passing day, a lot of website marketplaces have buyers interested in URL
shortening services. Maybe they want to put ads on it, maybe Affiliate stuff,
but selling your service is definitely a money maker.

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apgwoz
Tinyurl has ads, but I wonder how effective it is. People can avoid going
there altogether since they provide an API. As do most other services. Simply
making use of that API in your own services, software means that their number
of page views doesn't increase.

Now, it may get annoying, but having a "You are redirecting to
[http://somelongurl.com"](http://somelongurl.com) sort of page, would not only
be safer for all, but would also provide another spot for ads. (I know one of
the services does this already, but I dont' remember which one)

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alabut
There's a lot of tinyurl clones that basically do the same job, only focusing
on providing redirects for long urls, but one that does more and that I've
liked a lot recently is <http://tr.im> \- it got me to switch after years of
using tinyurl, mainly because it carries a history of links you've previously
shortened and shows some cool traffic stats for each one. So I can see them
adding even more features for a paid pro account.

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markat2
It would seem that, for isntance. tinyurl.com has ads on the homepage. The
service probably costs close to $0 to run so any upside is profit.

~~~
gaius
How? It may need little CPU or bandwidth, but at the end of the day it's
hardware, it needs to be somewhere, be powered and cooled, etc etc. The cost
may be low enough to be paid by the owner personally, but it's not going to be
$0.

~~~
redrobot5050
It could be free if it was written on AppEngine, and it stayed within the
"free" quota.

(For the record I know TinyURL.com was not, but i'm pointing out that a
newer/similar service could be.)

------
melvinram
Or is it because they are so limited in functionality that cost of server
processing is bare minimal?

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yan
"How do we make money? Simple. One word: Volume."

(edit: i'm referencing this:
[http://www.nbc.com/Saturday_Night_Live/video/clips/first-
cit...](http://www.nbc.com/Saturday_Night_Live/video/clips/first-citywide-
change-bank/229045/))

------
LurkingGrue
Volume?

------
themanual
simple. they dont have to make much money. They can run of a shared server as
it just has redirects. Also, they get money from paid advertising on their
website. DONE!

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ckunte
Market research.

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nuggien
you could probably run it on a $5 dreamhost account and get away with it.

~~~
melvinram
I suspect tinyurl's hosting account costs more than $5

