Unfair question: I'm a developer so I would very likely to build my own :) But from a business perspective I would definitely consider buying it; Bitly in particular has a lot of valuable technology that Twitter could monetize on.

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-...