TinyURL with a (questionable) revenue model: Adjix and Linkbee

Thanks to the restriction on the length of posts in nanoblog services like Twitter, the world needs URL shortening services like TinyURL and similar sites. The shortening services are free, though. So one has to ask, how do they make money? And where's my cut?

There are (at least) two URL shorteners that are ad-supported. Not only do they have a revenue model, but they share their revenues with people who use them.

The new kid on the block here is Adjix. Like TinyURL, it creates short links. But the pages users get directed to get a small ad frame above the content. People who create Adjix links get reimbursed at a $0.10 CPM (cost per thousand), or $0.0001 per link. Clickthoughs on the ads pay off at $0.20 each. Advertising is sold at a $0.35 CPM with a $0.75 click-though fee. That's a nice margin for Adjix.

The older LinkBee also pays for referrals. Rates are not listed on the site, but the company claims a 50 percent revenue share, better than Adjix. LinkBee top banners are bigger and more intrusive than Adjix, but the service also offers the option of putting interstitials (also called "blocker ads" by people who hate them) in front of destination pages. While annoying to some, interstitials don't change the experience on the destination site, or interfere with sites' own advertising programs once you get to them.

For its part, TinyURL creator Kevin Gilbertson is on the record stating that he could make a million dollars a month, "if he chose to attach a pop-up advertisement on each URL," according to his hometown paper, the Minneapolis Star Tribune. "But he won't, on principle," the report says. TinyURL instead makes revenue from Google ads on the its main site. That works when you have traffic at the TinyURL volumes; it wouldn't work so well for newer services. There's no revenue share model on TinyURL.

Ad-supported URL shorteners make economic sense, but only if you don't look too hard. Open your eyes beyond a squint and you realize that people who share URLs via shorteners are likely doing so to get some value out of the traffic that they already understand, whether it's ads on the site they are linking to, or spreading their marketing message, or simply sharing what they love with people they like. Putting an advertisement in front of that transaction can reduce the value of the link. With the low pay-back from the monetized shortened links, users could actually end up losing money with these services instead of making it.

As a tool for spammers, though, monetized short links make a ton of sense. But for everyone else, not so much.

Bonus link: www.hugeURL.com.

[magicmaster]

Threshold for creating new short-url service is very low, and I would not hestitate to switch to another alike service if any of them begins placing frame ads.

[t26l]

@magicmaster
same herehttp://www.youtube.com/watch?v=0lDsxyJgNLI

[AzizMusa]

For me, principle is overstated. The reality of the situation is when an organisation takes the 'moral high ground' and doesn't use pop up ads and loses potentially millions in revenues because of this - The organisation has lost. The only question as to whether to take this move or not should be are the barriers to entry high enough in this market to prevent users shifting source quickly. If there is a threat of reduced users as a result of this move, then a simple ROI analysis should show whether to take this decision or not. When Gilbertson says he won't do this on 'principle', I think he probably means he won't do it, 'because of the risk of losing customers'.

http://business-vs-technology.blogspot.com/

[lonestarState]

Being a developer for the short url service http://www.urloid.com we tested Ads on our service and noticed a drop in users overtime. As "magicmaster" mentions, I am sure users would not hesitate to change over to a new short url service which is Advertisment free. Advertisement with every url redirect kinda sucks.