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Does Bitly have a business model?

Stashed in: Startups, Twitter!, Facebook!, Curation, @vkhosla, @lizgannes

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News spread around Silicon Valley that Bitly has now raised $28.5 million in funding.

@LizGannes reports:

The round is aimed to help Bitly hire and grow. “We make many millions of dollars per year, but not appropriate for the growth that Bitly is trying to do,” said Bitly CEO Peter Stern in a phone interview this morning.

I'm not convinced that Bitly is making "many millions of dollars per year". (If so, why would they need to raise a $1.4 million convertible note in March?)

More importantly, what is Bitly's business model?

That depends on when you ask...

March 2009: There is no business model. Wow, that was honest.

July 2009: Marketers could pay for deep data access and analysis.

August 2009: Bitly wants to make money with a real-time news service.

January 2010: Bitly Pro paid subscription service for running URL shorteners for enterprises such as The Onion (, The New York Times (, and Pepsi ( Added analytics, end-to-end branding, and customer support.

February 2010: "Bitly turns clicks into revenue."

October 2010: 3000 companies are using Bitly's white label service but most of them are not paying. 4 million URLs shortened; 40 billion clicks.

January 2011: The value of a URL shortener is the statistics behind it.

January 2011: Bitly Enterprise charges $995/month for its professional dashboard.

And now?

July 2012: "We make many millions of dollars per year, but not appropriate for the growth that Bitly is trying to do."

So we're back to, There Is No Business Model.

Back to The Drawing Board with $15 million new dollars to figure it out.

Let consumers log in, like Delicious or Kippt.

And then monetize... how?

40 employees makes Bitly "significantly understaffed given what we're trying to accomplish"...


This is interesting since Vinod Khosla has been mostly investing in Green and Energy Saving Technologies. Shorter URLs saves energy, I guess.

Vinod Khosla is also very interested in the interest graph.

It's about the "corpus of data" Bitly owns:

Bitly is a free service that most people use without thinking about it, some people use it explicitly, and some companies pay for their short urls to be branded (so when you link from ESPN it is an ESPN customized short url). Then bitly uses this corpus, this network, of data, to sell insight services to customers.

Late to the party, but another look at the ups and downs of bitly:

Steve, you make a lot of great points in that article.

And actually, I enjoyed these:

What is the half-life of a bitly link? [Answer: about 3 hours]

What is the best day of the week and time of day to post on Twitter vs. Facebook? [Answer: Twitter -- early afternoon, Mon-Thu; Facebook -- mid-afternoon on Wednesday. For both, avoid weekends like the plague.]

...but Bitly's future is wide open. We'll see what happens.

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