Edit: other posts* state that Twitter has not yet decided if it will use an existing URL shorter or build out its own.
* http://thenextweb.com/apps/2010/04/15/twitter-launch-link-sh...
http://techcrunch.com/2010/03/01/bit-ly-1-5-million/
Would you pay millions of dollars for an URL shortner or build your own?
Bitly seems to be the default in these discussions and it's clearly the market leader, but there are other companies to consider. I think even starting discussions with another company would force Bitly's asking price down considerably. They may talk about how Twitter is _only_ 30% to 40%* of their traffic, but no business wants to lose those kind of numbers.
* http://www.businessinsider.com/google-and-twitter-wanted-to-...
Unfortunately, it seems like an acquisition of Bitly would really amount to charity because if they wanted, they could easily come out with their own competing service which would likely be adopted simply because it's easier to use. Presumably it would be right there on your twitter page or better yet, automatic.
This is my big concern with the current trend of turning websites into platforms. Any share-cropped idea that would be profitable to do in-house and is in line with the business goals will eventually be done in-house.
Also, bit.ly can make a play to service multiple social networks.
Simply put, they must innovate or die.
Dev sharecropping?
The platform must progress.
Innovate or die!
Theres Dev sharecropping? The platform must progress now. Innovate or die!
Is there a rich ecosystem of social networks who have all made the same design flaw that Twitter did, fixing which is bit.ly's only reason for existing? And did the social networks in this rich ecosystem all decline to fix the problem for themselves despite the fact that it can be hammered out by a junior engineer in an afternoon?
If only there were an exchange on which we could sell short stupid, private companies.
Twitter is a business. One that is potentially on the same scale of bad investments like Napster or Friendster. At some point they're going to need to focus on features that will make them revenue, and they'll start looking at the "ecosystem" of 3rd party apps, figure out which ones are low-hanging fruit, and harvest.