The ripple in the social network pond this week has been caused by the news that the URL Shortener tr.im is (probably) shutting down.
Nambu, who own Tr.im, can't find a viable business model for tr.im that can work against twitter's selection of bit.ly as their preferred URL shortener. I must admit, I like bit.ly and had used it as my default URL shortener via TweetDeck well before Twitter bestowed the app with "preferred" status.
The issue here is not so much whether Twitter picks winners, we have to remember that bit.ly has won mindshare, beating out the entrenched services like tinyurl, because bit.ly recognized the fact that URL shortening is a lot more than just shortening URLs.
What bit.ly did is provide a set of value added, yes - valuable, services to their users. That is the foundation for a viable business. The statistics and custom short URLs are the types of service that people are willing to pay for.
Once again Web 2.0 principles come in to play. It is in fact the by-product of the service that is more valuable than the service itself. The ability to track who used a link and where they came from, and when they came is far more valuable than the shortened link itself. Google learned this lesson a long time ago. Their search service is valuable but the information and insight they gain from people using search is far more valuable.
Network effects and the wisdom that can be divined from the actions of the crowd. These are the factors to consider when developing a Social site. "Me Too" services will not win - get over it! You have to deliver something extra that adds depth and richness to the network fabric.
Bit.ly may be safe for now, but if someone else comes along with an alternative that finds a way to deliver value in ways that bit.ly had not thought then they may have a fight on their hands.
