Q:

How does the Bitly service make money?

A:

Quick Answer

To turn a profit, Bitly sells the user traffic data it collects to marketers, and offers a paid version of its service that allows website owners to use its URL shortening and tracking technologies with their own domain names. Additionally, the company also markets its services to several major enterprises.

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Full Answer

What makes Bitly so financially successful is the level of penetration it has gained into areas that other services cannot reach. For example, Google can collect and analyze user traffic by monitoring interactions with its search engine, but it does not have insight into what users are clicking on once they have left its site. On the other hand, because Bitly links are used on a wide range of websites, such as Facebook, Twitter and YouTube, the company has access to a broader spectrum of data that would otherwise be invisible and left untapped. Such data is invaluable to marketers, as it allows them to track brand penetration, predict user behaviors and target their campaigns directly at individuals who are more likely to be interested in their offers.

Bitly's paid service augments its data-mining business model by offering clients the ability to customize and refine the information they receive according to their specific needs. In addition, giving its customers the option to use their own domain names with the service allows its clients to maximize brand awareness, such as with Verizon's use of the easily recognizable domain name Vz.to together with Bitly technology.

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