Today, Nambu, the company behind tr.im URL shortening service, announced that they are shutting down tr.im because it is not economically feasible for them.

tr.im did well for what it was, but, alas, it was not enough. We simply cannot find a way to justify continuing to work on it, or pay its network costs, which are not inconsequential. tr.im pushes (as I write this) a lot of redirects and URL creations per day, and this required significant development investment and server expansion to accommodate.

It appears they tried to sell the service but no one was willing to buy it even for a token sum because it is not monetizable. Neither they could collect a subscription fee for using URL shortening services nor they could monetize the huge amounts of data they collect because that data is available everywhere. They ultimately decided to shut it down but it left many users of tr.im fuming because all the links they have shared in Twitter as well as elsewhere in the web gets broken making them worthless. This episode exposes the tragedy of URL shortening services and how there is very little chance to monetize the service with so many players in the market.

Bit.ly is another URL shortening service which has 3 million unique monthly visitors and with a $2 M Series A funding. Recently, Twitter ditched tinyURL.com and selected bit.ly for their URL shortening needs. This close partnership has been cited by tr.im as one of the reasons for their demise. Even though Twitter and bit.ly are working closer, I think it is time for Twitter to buy their service outright. This will give confidence to Twitter users about the URL shortening service. If Twitter owns bit.ly, the chances of the service to go down like tr.im are actually very slim. There is no way Twitter will shut down a service that is so intertwined with their own. Plus, Twitter is yet to monetize their service. I am pretty sure that one of their options will be based on data mining. Bit.ly offers an opportunity here with their own collection of data which can be effectively mined and monetized. Their existing close partnership with bit.ly should make it easy for Twitter to go forward with this option. It is important for Twitter to understand that their success depends on a reliable URL shortening service and buy one such service rather than partner with them. This will help people trust that URL shortening service and use in their tweets.

For those of you who are looking for a reliable URL shortener, consider buying a really short domain name and host it on Google Apps. Google Apps offer a short link service hosted on Google App Engine as an add-on to their Google Apps service. You will be able to shorten using your domain with a bookmarklet. This service offers some basic level analytics which can be useful for users.

Update: Sam Johnston suggests a great alternative to the problems associated with URL shortners. He has built a community service using a mechanism for webmasters to indicate the preferred short URL(s) for a given resource, thereby avoiding the need to consult a potentially insecure/unreliable third-party for same. It is running on Google App Engine. Check it out here.

Related Posts:

• Tr.im Shuts Down; Is There A Business In URL Shortening?
• tr.im Throws In the Towel
• Tr.im URL Shortener Shuts Down; Short Links to Die?
• Twitter Hammers Nail in Coffin for Tr.im
• The Problem with URL Shorteners: ow.ly Server Errors
• Twitter's platform shortcomings
• SHORTURL SAVIOR: Bit.ly Swoops in to Save Tr.im