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.
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.
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.
No I couldn't have. Facebook has significant consumer lock in. Also, the costs of running a social network are high, while the cost of running a URL shortener is almost nil.
I guess what I'm trying to say is that user momentum is what differentiated Facebook from the countless other social sites that were sprouting up back then. Not anything inherent to the site. Consumer lock-in has only taken hold now that most everyone has already chosen the Facebook platform.
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.
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.
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! :)
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.
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.
It's not actually a hash of the URL, rather it's typically simply a base 64 serial number that increments for each new URL. That's why the URLs start at 2 characters and grow to 4 or 5, though the number is so large that they'll rarely see 6. http://tr.im (my weapon of choice) for instance is still at 4 characters.
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.