The Twitter Economy: URL-Shortener bit.ly Raises $2 Million First Round
This story was written by Tameka Kee.
Twitter may be on the path to bringing in real revenue, but that's not the case for most of the other startups like TweetDeck and Stocktwits that have launched various add-ons. Still, that lack of an obvious business model hasn't scared investors away: both TweetDeck and Stocktwits have raised six-figure seed rounds, with similar services like Identi.ca also nabbing funding. The latest Twitter-related startup to get funding is URL-shortening service bit.ly, which picked up a $2 million first round, per ReadWriteWeb.
O'Reilly AlphaTech Ventures led the round, with participation from the Accelerator Group and Social Leverage (the new fund from serial investor Howard Lindzon), as well as individual investors like Mitch Kapor, Jeff Clavier and Ron Conway. Founded by new media startup incubator Betaworks, bit.ly isn't a Twitter add-on per se, since people can use the service to shorten links and embed them in everything from emails, to tweets, to blog posts. But its growing popularitythe company told MediaMemo that people clicked on 20 million of its shortened links last week, and that the volume goes up 10 percent each weekhas undoubtedly been fueled by Twitter's growth (see the similar upward curves, via Compete). More after the jump.
There are other URL-shorteners like TinyURL (which we use), tr.im and Cli.gs, each with varying levels of functionality and click traffic analytics, but bit.ly's robust real-time offering has earned it the praise of a number of tech bloggers. The bigger question is whether companies will be willing to pay for a premium versionwhich seems like bit.ly's most likely business model, since it doesn't run text ads like some of its competitors.
By Tameka Kee