In 1999, on a bright Saturday I exited an office building in Monaco, I called my mother and told her I had just sold my company for USD 10 million. Within two years my paper worth evaporated in the bubble but I can still claim to have started one of the biggest and most successful Redirect Services on the web. At its height V3.com (famous for owning domains like Come.to, surf.to and go.to) served 8+ million customers.
I’m not just saying this to brag (well, maybe a bit) but also because I think it gives me some insight, or historical reference, when it comes to the URL shortener business that so many people talk about these days. I thought I’d share some of my ideas on the subject with you.
“The most awesome stage”
Last year, Facebook's VP of Design thought the TNW Conference main stage was the best she'd ever been on.
First of all, I don’t get it. Not that I don’t like them or have problems with their technology, as some people clearly have. My problem is with their value, business plans and philosophy. When I ran my redirect service and had a million users we showed one of those annoying pop-ups during each redirect (average 4 redirect per member) which we sold ads in.
That system sorta kinda worked. We managed to cover the cost of operating our business and that was it. Of course the cost of running a redirect business is a lot lower these days. But the opportunity to serve an add on each redirect is gone too. So how exactly are these short URL services going to make money and what opportunities do they see?
When Short URL services are reviewed or present themselves we hear three answers to the familiar ‘how will you monetize’ question:
1: by offering Premium Accounts
2: by selling data of what is popular on the web, now
3: by showing ads, somewhere
Of course all these models are worthless. Lets start with the 1st one: Premium Accounts:
There are now hundreds of Short URL services to choose from who are all fighting over markjet share and are offering all their features for free. If one of them would restrict certain functionality to sell that as a premium package all the other sharks would jump in to offer the same features for free to gain market share. No money here.
One theory is that these Short URL services seem to know where everyone is going, at what moment, and that this data is worth a lot of money. It is a nice theory but there are a LOT of companies who know a LOT more about where everyone is going.
Google, anyone? Or what about Alexa? Or Facebook, with 200+ million members who all share links, knows a lot more about its members AND what they are doing and sharing than all the short URL services on the planet. No dice.
How about ads? Well certainly not in Pop-ups! Those days are over, (un)fortunately. Some services show ads in the Bookmarklet window but people surely don’t click those*. The whole point of a Short URL service is to be as invisible as possible. The perfect Short URL service is one you never see but just allows you to use less characters in Twitter.
In fact, the whole Short URL business would most likely disappear overnight if Twitter would simply allow you to post any url you wanted but wouldn’t count (or show) the whole URL. They currently do that for URLs that aren’t really long, like the example on the right.
Imagine this: you enter a URL in the Twitter field and Twitter takes off the “http://” part and shows only the first 5 characters of the URL, hyperlinked, and with “…” behind it. When you hover over the URL you see the whole URL. No matter how long it is, Twitter doesn’t count the characters.
There, that is MY perfect Short URL service.
Short URLs won’t be able to make money with their data, extra features or ads. So what the hell is left? A very tiny outlook…