Bit.ly, the URL shortening service that was spun off by John Borthwick’s Betaworks incubator and relied on Twitter for its early growth, said today it has closed a $10 million Series B financing with RRE Ventures and a group of other investors. In an interview with GigaOM, the Bit.ly founder and CEO said the funds would be used to build out new features for the service, and would also help the company make some further moves to monetize the growing traffic it is seeing via Twitter, Facebook and other social networks. Also joining in the financing were AOL Ventures, Founders Fund and Ron Conway’s SV Angel fund.
“We’ve been fairly capital-efficient so far; we’ve done everything we’ve done on just $4 million in financing,” Borthwick said. “This will allow us to aggressively continue building out features, but will also allow us to do a lot more on the monetization front.” Bit.ly launched paid Pro domains earlier this year, which is effectively a white-label version of the service, but Borthwick said that the real secret to monetization of Bit.ly’s network “lies in giving users access to the underlying data, so they can see trends. I think that’s where the real potential is.”
Twitter launched its own built-in link-shortening service called t.co in June, which effectively “wraps” every link transferred through the network — even already shortened links — with the company’s own shortener. Twitter said at the time that it would be collecting and analyzing the data from all those shared links, but Borthwick said his impression was the company wanted mostly to track the performance of its Promoted Tweets ad campaign.
“I think they are doing it mostly for the advertisers,” he said. “Twitter hasn’t made a lot of that data public, and I don’t think they will.” Although he didn’t discuss it, Bit.ly is also reportedly involved in some other ventures involving its data, including a partnership with the New York Times to design a personalized news reader called News.me. Borthwick also wouldn’t comment on reports of Libyan regulators interfering with other .ly domains, but a statement from the Libyan official involved (warning: adult images) said that the case in question would not have proceeded if it had involved “a URL shortener for general uses, similar to bit.ly.”
Borthwick said in a blog post about the financing deal that bit.ly links have been clicked more than 40 billion times so far this year, and included a chart of the service’s growth (embedded below). Those numbers don’t actually represent clicks, but what the company calls “decodes” — that is, when the shortened link is expanded (which may or may not involve an actual click, for example, if a software program automatically expands the URL). The blue line on the chart represents daily clicks (or decodes) and the red is the moving 3-week average. The Bit.ly CEO said that over 4 billion unique URLs have been shortened using the service.
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