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 Covering Betaworks closely, I was intrigued by this week's news that the New York incubator/investor had spun off its Bitly Inc. URL shortening service into a separate company, with Bitly's raising about $2 million in venture capital reportedly.If you follow me on Twitter, where I'm @MKFlynn, you know that I'm a frequent user of Bitly, which I use to distribute my Dealscape tech blog posts and episodes of The Deal's Behind the Money show over the Twit-osphere. While some other reporters are questioning the apparent $7 million valuation for what they see as a simple URL shortener, I think there's a lot of hidden power for publishers in Bitly's analytics. But what I find most significant in Bitly's news is what it says about Betaworks and its hybrid approach to nurturing technology. Betaworks was founded by entrepreneurs/investors John Borthwick and Andrew Weissman (pictured, left and right). The two met back in the '80s when they were undergrads at Wesleyan University; in the '90s they worked together at Time Warner Inc.'s (NYSE:TWX) America Online Inc. They set up Betaworks as an operating company with shareholders rather than as a VC firm with limited partners. Since it was founded about 18 months ago, Betaworks has backed roughly 20 Web 2.0 startups, including Covestor LLC, OMGpop (previously known as Iminlikewithyou), Tumblr Inc. and Tweetdeck. The firm often co-invests with New York's Union Square Ventures and Boston's Spark Capital, two of the VC firms best known for backing social media startups. But it's still early days for Betaworks, and its model of mixing incubating and investing is still unproven. On the incubation side of the equation, skeptics question whether it's possible to create a startup without a founder whose idea it was; and on the investment side, critics speculate about conflicts of interest between the incubated companies and the portfolio ones down the road. Another uncertainty about the technologies Betaworks bets on is whether they are just little tools or features rather than full-fledged services on which a whole company can be built. Despite the questions, I can't help observing that the Betaworks model is increasingly getting validation. The first outward sign of success came last summer, when Betwaworks sold its Summize Inc. real-time search service to Twitter Inc. for a reported $15 million plus stock in Twitter. Then RRE Ventures, a venerable New York VC firm, invested in Betaworks. Now Betaworks' Bitly has picked up an impressive array of backers, including O'Reilly AlphaTech Ventures, or OATV; Howard Lindzon's new Social Leverage fund; Jeff Clavier's SoftTech VC firm; and angel investors including Ron Conway, known for being an early backer of Google Inc. (NASDAQ:GOOG); Roger Ehrenberg whose most recent investment is Domdex Inc.; and Mitchell Kapor, co-founder of Lotus Development Corp. OATV co-founder Bryce Roberts is joining Bitly's board. "We really view ourselves (as you know) as a (new) media company, albeit one that does things differently," says Betaworks' Weissman. "This is our first internal spin-out. As part of this strategy, we are launching Chartbeat at the Web 2.0 conference. We saw a problem about tracking content and data. We built it. It grew. Over 20 million bit.ly URLs were clicked on last week alone. It was time to bring some partners in." - Mary Kathleen Flynn
CategoriesComments
From: Roman,
The truth on statistics Bit.ly provides is allarming – it statistics are egregiously inaccurate at best and fraudulent at worst. Bit.ly presents users with phantom numbers that counts cyberspace’s ghosts and drones, robots and crawlers, presenting them as they are all humans, something they are not. We detected one single bitly whose statistic shows 1,677,769 (!!) clicks but not a single of them came from an actual human behind the click: http://www.seo-artworks.com/Twitter/twitter-study-millionclicks.htm
Posted on:
October 11, 2009 6:39 PM
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This is just proof that there is a big opportunity in the short URL market.
We think our URL shortening service http://zi.pe brings a lot of value into the short URL market.
We not only shorten links, but also text, email addresses, and photos (with upload and micro url output).
People get a bad taste in their mouths for short url services because they are still using the original old school ones that have little to no value.
Bit.ly and TinyUrl are both out-dated and their url's are too long. One character can make or break a great twitter post...