URL shortening service Bit.ly gained a lot of ground when TweetDeck, a desktop application built on Adobe AIR for making Twitter easier, made the service a default. Twitter has roughly 20 million users that are actively clicking on short Bit.ly URLs which redirects them to interesting content.
Like Twitter, the problem with Bit.ly is that the service did not have any sort of revenue model. However Bit.ly raised $2 million in VC funding from Betaworks, O?Reilly AlphaTech Ventures, Social Leverage, SoftTech VC, and Ron Conway. Today Bit.ly General Manager Andrew Cohen revealed an idea to how they plan to make money in an interview with Wired.
Cohen said that Bit.ly is planning to take the shortened links and creating a real-time news service that will work in a similar format as Twitter trends. The news service would feature the most clicked links.
?We?re seeing more than a billion clicks in the course of a month,? stated Cohen. ?Looking at that volume of data, we can see the most interesting and the most important content that is being shared across the whole of the real-time web.”
Twitter is rumored to be considering an outright acquisition of Bit.ly. I would be surprised if Twitter considers actually buying out Bit.ly when it is not difficult to create a URL shortening service yourself.