Entrepreneurial

Is Bit.ly’s Twitter advantage unfair?

August 13, 2009

The rise of Twitter as a social-media powerhouse and its micro-blogging platform has created a renewed urgency for URL-shortening services.

There are now endless numbers of websites vying to shorten your too-long tweets to conform to the 140-character limit, but as in every competitive industry not everyone can survive and thrive. This week one of the players, Canadian-based Tr.im (owned by Nambu Network), announced it was throwing in the towel.

Now a small business closing up shop is not normally newsworthy, except when they cry foul as the ship is sinking. While on the one hand Nambu president Eric Woodward told Computerworld’s Gregg Keiser that Tr.im was “accepting the realities and moving on,” he also seized the opportunity to take a shot at Twitter for making Bit.ly its default URL shortening service.

“They’re the default, and even if we’re better, it won’t matter, so what’s the point?” said Woodward. “As soon as Bit.ly was made the default, the game was over.”

Tr.im initially announced its demise through a blog post last Sunday, but 48 hours later did an about face to say it had been resurrected and will keep on trimming those URLs “indefinitely, while we continue to consider our options in regards to Tr.im’s future.” (see Tr.im blog post)

Tr.im further stoked the Bit.ly-Twitter relationship debate, by adding that “Bit.ly has a monopoly position that cannot be challenged with reasonable investment or innovation unless Twitter offers choice. This is a basic reality of challenging monopolies. Bit.ly has deep personal connections and agreements with Twitter that we simply cannot compete with. And it is our humble opinion that this type of favoritism will become an issue for all Twitter developers.”

If having Bit.ly as Twitter’s go-to link shortener is unfair, you would think industry-leader TinyURL would join in the debate. After all it was Tiny’s Twitter perch that Bit.ly usurped back in May. While Bit.ly has quickly become tops on Twitter, overall TinyURL still controls more than 70 percent of the market (see Tweetmeme report from March 2009). TinyURL founder Kevin Gilbertson appears unfazed by Tr.im’s attempts to kick up a dust storm around this issue and certainly has no plans to cease operating now that Tiny is no longer Twitter’s best man.

“With Twitter becoming big it does give the company that they partner with an advantage, but there’s still room in the market for other players,” Gilbertson told Reuters, adding that before they were replaced by Bit.ly, TinyURL’s Twitter traffic amounted to just 10 percent of their overall total. “There’s lots of uses for URL shortening other than just Twitter.”

Gilbertson, who launched TinyURL in 2002 long before the rise of social media, said most of his traffic still emanates from people needing to shorten links in emails. He pointed out that unlike TinyURL, Tr.im’s business model seemed to be largely dependent on Twitter, which became untenable when Bit.ly became the default.

“From that perspective they can no longer pursue what they thought they were trying to do, so they’re now switching their direction,” said Gilbertson, who admitted his Twitter traffic has plateaued since May. Overall TinyURL’s average daily pageviews are down more than 4 percent over the last 3 months, according to Alexa Traffic Stats. This is prompting Gilbertson to reach out to other potential partners. “From a business perspective you want to try to get as many partnerships as you can to maintain the market share. Of course we’d like to arrange deals with people to be able to have them use us as the default.”

Gilbertson also cautioned that if you’re going to have an exclusive partnership arrangement, like Bit.ly now has with Twitter, it’s best not to get too enamored with it so that it becomes too big a slice of your traffic. “The problem with having a deal with Twitter where you are the default and you’re heavily depending on them, is what happens when they do switch?”

Comments
11 comments so far | RSS Comments RSS

Somebody call the waaaambulance. Sorry, but that’s the nature of competition & a free market. Does Pepsi go around crying foul that McDonald’s only serves Coke, and that Coke has become a generic name for cola at many restaurants now because of deals like that, and that Coke has a monopoly on soda and that Pepsi should just shut down and go home?

And I think the people at Tr.im should grab themselves an unabridged dictionary and look-up what the term “monopoly” really means. Having a dominant market share does not mean “monopoly”, and being second behind first place does not mean other people have give you equal access to everything. It’s an entitlement attitude that has become all too prevalent in the business world.

Business men who feel that they are owed something because their business isn’t doing so great.

Way to go federal government. You’ve created the business welfare class. You bail out some companies for poor business plans & piss-poor management, and now every CEO feels like they’re owed something when their business fails.

 

Fair? Twitter is free to enter into whatever relationship they feel is in the best interest of their customers. Tr.im and others need to look at other services and relationships. If they did not land the “Mcdonald’s” client they need to go after others. If they can not make a go of it they should move on. And Tr.im customers should not complain about the demise of their URL service when they get it for free. Not only is there a “business welfare class” but there is a “consumer welfare class” of people that expect everything for free.

Posted by LC | Report as abusive
 

In business, you kill or get killed.Period.

 

I think the point is, tr.im was/is a better service than bit.ly – but since Twitter gives special status to the latter, even a superior product couldn’t compete.

Posted by Ibrahim | Report as abusive
 

Excuse me, but if the point is to shorten URLs as much as possible, wouldn’t Bit.ly and even more so Tr.im have an obvious advantage over TinyURL.com based purely on their own shorter URLs? Let the shortest man win here, is what I’m thinking.

 

Tr.im was back online before this article was even published. Get with the times people…

 

Short url’s come in very handy, especially with affiliate advertising.

 

I find this article to be indicative of so much that is wrong with the tech economy.

Twitter is already fairly useless and is usually nothing more than a way to waste time. Not to mention that it is still unprofitable. Yet it receives ridiculous amounts of hype.

We’re not even talking about Twitter here though, we’re talking about companies that essentially act as parasites on Twitter.

And this kind of “innovation” is the future of the American economy? And this is the attitude they bring? Whatever happened to the real, physical economy??

I expound on my views on my blog, which you can find here:

http://cbfe-econ.blogspot.com/2009/08/tw itter-and-its-parasites.html

 

First of all, if you think we live in a free market society you are kidding yourself.

However, life and mostly business is not fair, especially in a fascist regime, I mean a free market society. If they don’t like it do what everyone else does… Get a lawyer and go to court.

Posted by anamericancynic | Report as abusive
 

I agree the natural growth of the small business will be be far more profitable for the founders than seeking a cash injection for which they are may sell their future.

Posted by Suzy Orman | Report as abusive
 

Great post! My friend runs a small business we do internet marketing for companies and so a lot of our e-newsletter, blog and seminar content revolve around for promotion. Thanks!!!

Posted by Internet Marketing Success Stories | Report as abusive
 

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