Are URL Shortening Services Becoming a Profitable Business?

When I first read this post I felt a little confused as to how URL (uniform resource locator) shortening services were beginning to generate income. This, I believe, is a direct result of the massive volume of TinyURLs and Bit.lys being used on micro blogging sites such as Twitter. Almost every URL you see on these networks have been shortened using these services and I don’t think they’ll be slowing down any time soon.

On March 30, 2009 Techcrunch reported that Bit.ly received a payment(s) of over 2 million dollars. My jaw completely dropped when I heard this, astounding me about how such a simple service could make such an incredible amount of profit.

Ever since Bit.ly’s introduction as a competitor to TinyURL and various other URL shortening services, website hits have hit the sky while TinyURL has been maintaining a steady, but positive amount of traffic. TinyURL however, is still on the top of the bunch with almost 75% of the market share while their multiple competitors remain a steady 62% behind. Bit.ly has 13%, ff.im has 5%, is.gd has 4%, while twurl.nl has barely 2%… Talk about TinyURL being ahead in the game!

There is also a new aspect of the business that is crawling into the minds of people such as how long a TinyURL or a Bit.ly can be maintained. Eventually, there will be quite a substantial amount of shortened URLs that the URLs won’t be short.

Fortunately, as long as there is a demand for these types of services new companies will join into the race of being the ultimate shortened URL service, leaving us with plenty of alternatives. What do you think?