So much for the recession – bit.ly, a URL shortening service, has raised $2 million in funding. TechCrunch did the math (back of the napkin, natch) and figures that bit.ly is worth about $8 million, while its more well-known competitor TinyURL is worth at least $46 million. Who knew there could be so much money in building a simple service to shorten really long web addresses and perform automatic redirects?
I used to be a TinyURL user, but switched a few months ago to bit.ly in order to get better analytics about the links I post to Twitter. These services are really a dime a dozen, however. I’m pretty amazed that investors would sink that much money into bit.ly.
Here’s what Peter Kafka wrote about the deal today:
So where’s the money? bit.ly is free to users, and the company says it doesn’t plan on selling its analytics or other tools to publishers. Team bit.ly says revenue will come sometime down the road, from something else–when they figure out what that is.
This is great news for bit.ly, obviously. And for me it means that my favorite URL shortener will be around for a while. Beyond that, I’m not sure what to think. Do the investors see a buy-out in the future, or do they really think bit.ly will be able to generate revenue at some point?
It also makes me wonder what kind of service will get some investor love next. A simple copy-paste service? TwitPic?