
Is a Shorter Web Address Worth Big Money? bit.ly Raises $2M - peter123
http://mediamemo.allthingsd.com/20090330/is-a-shorter-web-address-worth-big-money-bitly-raises-2m/?mod=ATD_rss
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tsally
Not a fan of this investment. Shorting a URL is a good with many substitutes
and limited consumer lock in (unless you count bookmarks, which could be
easily replaced).

EDIT: Guys, on Hacker News you shouldn't downvote comments you disagree with.
You should only down vote comments that add nothing of value to the
conversation. My position is very well reasoned out. And as for real time
analytics, that's a good with a lot of substitutes as well. The referer given
by your web browser for example?

Also, if knowing the click through rates for tweets ever becomes a market with
money in it, Twitter can spend 500K to buy another one of the millions of URL
shorteners out there and integrate it into their service. If their entire
business model depends on analytics for Twitter, they are waiting to get
stomped on by Twitter's tens of millions of venture capital.

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ivankirigin
It's about the real-time analytics, not the length of the URL

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boucher
That's a big maybe. I'd wager that a small percentage of the people who use
bit.ly to shorten links are actually using the metrics. And I agree that
bit.ly could probably be cloned trivially. There's no network effect, so
there's no real reason to use bit.ly over any other service.

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webwright
Growing 10% per week. So there's SOME network effect. ;-) They aren't buying
adwords!

I think the play is in the aggregate data... i.e. take the most linked to
stuff, toss it on a page, and you have Digg without the voting (good content
theoretically bubbling up).

All that said, I'm not a huge fan of the investment-- certainly could be big,
but it's fairly challenging to imagine it as huge.

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mustpax
Well as they mention midway through the article: it's not the URL, it's the
analytics.

Number of followers is a very coarse metric for twitter popularity, it would
be very useful to know click-through rates to gauge which content draws more
viewers. Right now it's hard to tell which updates "sell" better than others.

~~~
jedc
Exactly. It's the only reason I use bit.ly; so that I have a basic gauge on
how many people clicked through, and when.

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buggy_code
Dumb question:

I understand how URL shorteners work (hash the URL)

however, how do they make money?

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aditya
<http://news.ycombinator.com/item?id=508278>

Really, really good discussion there.

~~~
thorax
Even better discussion if you read the entire topic:
<http://news.ycombinator.com/item?id=508132>

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tolmasky
I don't really know whether this will pan out or not, but I do find it really
strange how people defend this move with "examples" like twitter and facebook.
Even if we assume that these are valid comparisons, we do realize that neither
Facebook nor Twitter is really a success yet and the jury is still out on both
of them right? Unless you're using "being able to endlessly raise VC" as your
metric of success, then there is still no guarantee that they will actually
generate tons of money and match their valuations. For all we know this
completely twice-removed model of generating profits _doesn't_ work, and thus
using them as shining examples isn't that prudent.

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nir
I think the key misunderstanding here is judging bit.ly (or any other
company's) value by whether/how much money VCs invest in them.

VCs raised money which they now are expected to invest. They don't know what
will end up a good investment, since they don't have some future-predicting
sixth sense that the rest of us lack. Bit.ly has some buzz around it, a few
A-list bloggers mention it occasionally and the word "Twitter" can be seen in
a few places on its front page, so it gets dropped $2m.

I'm not being sarcastic here - these are valid reasons to invest, the same
features might help the VC flip it later to, say, Twitter for $10m. (And
there's always AOL! :)

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moe
_I'm not being sarcastic here - these are valid reasons to invest, the same
features might help the VC flip it later to, say, Twitter for $10m. (And
there's always AOL! :)_

Cynism at its best. A stupid investment can be justified when there's reason
to believe that someone even _more_ stupid will come around to bail you out
later. Don't get me wrong, I do see the truth in this statement. I also find
it deeply disturbing.

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nir
From the VC perspective, they're doing their job - getting a return on the
investment. I agree it's disturbing, because ultimately it's a bubble, which
is then followed by bust and so on... It makes for interesting times, though.

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pj
The amount of money a "Web 2.0" site raises is inversely proportional to the
value of the service it offers.

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JacobAldridge
Does that mean a bootstrapped, unfunded start up (like, say, recent Ask HN
candidate ChuWe) delivers infinitely more value than Facebook?

sgroves will be happy to hear that!

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pj
How do you calculate the value of Facebook and ChuWe?

