

Why investing in bit.ly last week was a bad idea - acpigeon
http://aaronpigeon.com/why-investing-in-bitly-last-week-was-a-bad-id

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ryanwaggoner
The author didn't really elaborate on what makes this really troubling: the
tens (hundreds?) of millions of existing shortlinks out there in the wild
right now that would be worthless (or worse, directed to spam or abusive
sites). Generally, it's bad, but maybe not the end of the world if a startup
loses their domain. But this seems like it would be an unmitigated disaster
for a service like bit.ly. I hope they're aggressively working on some kind of
strategy to get away from that domain name ASAP.

And this, kids, is yet another example of why URL shortening services should
be avoided. They've single-handedly put ability to break the functionality of
a growing chunk of the internet into the hands of one demonstrably unstable
dictator in a developing nation.

~~~
simonw
bit.ly have been running j.mp for quite a while - I've used that instead of
bit.ly whenever I needed a short URL with statistics tracking.

~~~
ryanwaggoner
Doesn't matter if most of the links being generated are still at bit.ly. The
issue isn't switching to a new domain after the fact; bit.ly has all the data
for all those links and could setup a new domain right away, but all the old
bit.ly links are still embedded all across the web. Getting those changed is
the hard part.

~~~
tptacek
Or, Libya could go crazy, decide to fuck with the rest of the world, and have
every bit.ly link redirect somewhere that will blow up IE, Firefox, Flash,
Quicktime, and Reader.

Crazy-er, I mean.

~~~
SkyMarshal
Out of curiosity, is there any kind of list the risks various TLDs pose to
businesses? Something similar to the US State Department travel warning list,
for example (but including the US too)?

I ask b/c I recently bought a .co domain for a side project which will depend
heavily on the domain similar to bit.ly, and my surface impression is that
Columbia is stable enough for TLD risk not to be an issue. But there is the
FARC, drug cartels, and probabaly some unknown unknowns as well, and this .ly
issue is making me wonder if I should reconsider before irreversibly locking
in this domain.

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michaelchisari
I wonder if, even if Libya were a stable country with no reason to cause
worry, if it would still be a bad idea to invest $10 million into such a
simple product.

Unless there's a long term plan, I don't see where the monetization of this
service can come from. I always thought after the last dot-com bust, we'd be
sensitive and conservative in respect to questions of profitability and
revenue, but this investment in bit.ly gave me a bit of a sense of deja-vu,
and it wasn't a good feeling.

~~~
michaelbuckbee
I think a common misconception is thinking that bit.ly is in the business of
shortening URLs when in reality they're in the analytics business of tracking
when, where and how often people use and share links.

As to monetization, they already have a $1000/month enterprise level plan that
gives you tons of analytics and that runs lots of the custom branded URL
shorteners (4sq.com, yhoo.it, pep.si, cs.pn).

If I were a bit.ly investor my number one concern would be Google linking up
their goog.gl shortener with Google Analytics. Doing so would punch a huge
hole in Bitly's value proposition.

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alain94040
It's potentially extremely dangerous for bit.ly.

Most other foo.ly startups can happily rename themselves fooly.com, but for
bit.ly, there are so many existing links out there, and shortness is so
important, that the transition would be much more painful.

That being said, no serious investor would have put $10M on bit.ly just
because it's 5 characters long. The analytics or something else is where the
value is, and that doesn't depend on the domain name being in Lybia.

~~~
sbov
This may be going out on a limb here, but investors invest assuming you aren't
going to lose your domain name. Especially if its based upon traction.

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dkasper
What's the point in putting domain names under the control of a country these
days anyway? I understand that Lybia or some organization therein collects a
fee from people registering .ly domains, but it would certainly be possible to
still pay them the fee without giving them the power to "turn off" domain
names without cause. They could even retain the right to refuse to sell
domains to people, but once you've bought the domain it needs to be yours in
perpetuity, as it is with other property. This is a completely artificial
problem based on archaic rules that has a straightforward solution.

~~~
tptacek
The ISO country code domains aren't a public good; they're allocated to their
respective countries, to use as they wish. Libya is within its rights not to
allocate any domain names at all.

Conceptually within the DNS, there is no difference between APPLE.COM. and LY.
You wouldn't expect Apple to allow random people to set up names under
APPLE.COM. John Postel oversaw a decision, multiple decades ago, to allocate
countries their two-letter ISO code; if you want to blame someone, blame
Postel.

I personally think it's a reasonable policy, and that the fault lies in people
willing to do business with a manifestly evil country for the sake of a vanity
domain.

~~~
jrockway
Actually, APPLE.COM. and LY. are different. You get the address of the LY.
server from a public root nameserver; servers set up solely to provide a
starting point for "the Internet". You only find APPLE.COM. because you look
in COM. first.

When you choose to use the root nameserver, you are assuming they are making
good decisions about who to delegate to. When COM. delegates to Apple's
servers for APPLE.COM., that's a good decision. When the root nameserver
delegates to the current LY. servers, that's a bad decision, because LY. does
not hold up their end of the bargain and properly delegate. VB.LY. should
delegate to VB.LY.'s servers. But for some reason, they refuse to do it. So
the root server should simply not delegate to it.

Incidentally, nobody is forcing anyone to use "the" root nameservers. If you
want vb.ly back, just use a different root!

~~~
tptacek
What's the bargain Libya struck up with the IETF/IANA regarding delegations
under .LY?

~~~
jrockway
Maintaining records so that delegation to the owner of a domain happens. VB.LY
owns VB.LY. LY stopped delegating.

This breaks the Internet.

~~~
tptacek
This exact same argument says that Namecheap should lose its registrar status
for "breaking the internet" when people don't pay to renew their domains.

Similarly, if Apple ever made the mistake of setting up an NS record pointing
JROCKWAY.APPLE.COM to your nameserver, they'd be "breaking the internet" to
change their mind.

The reality is that there is no technical difference at all between LY. and
APPLE.COM.

~~~
jrockway
No technical difference, but as a TLD, they should be held to a higher
standard.

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sjtgraham
I remember reading that nic.ly or their agents made some effort to contact
vb.ly's owners to discuss their concerns with vb.ly, but received no response.
The author attempts to paint nic.ly et al as being capricious, but it seems to
me there were some attempts made to resolve this amicably.

~~~
tptacek
I think the analysis in this article stands even if you don't buy VB.LY's
story about NIC.LY.

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treitnauer
Next year, they will simply apply for .BIT –
[http://www.circleid.com/posts/reduce_the_risk_of_url_shorten...](http://www.circleid.com/posts/reduce_the_risk_of_url_shorteners_to_your_brand_with_your_own_tld/)

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gallerytungsten
This means that perhaps the big VC money will conspire to compromise or
overthrow Quadaffi.

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aresant
Is it really a story that an Islamic nation would shut down a pornographer?

That seems like that is a foregone conclusion, whereas bit.ly is an incredibly
visible, legitimate service.

Libya has had a tumultuous few decades, but today they're in the United
Nations Security Council, have paid reparations for terrorism, and their
president is the Chairman of the African Union.

Why would they destroy a partnership with the most visible silicon valley
company to have any association with their country?

~~~
dualboot
No, the story is that they _can_ shut down a domain name and there is no
appeal that can be filed.

You exist at the whim of the dictator.

To further provide fuel for the fire the author cites and example of them
shutting down another URL shortening service because it was being used to link
pornography. Something I'm sure Bit.ly is often used for as well.

