If bit.ly would put in the referer logs the url where the bit.ly link is, then bit.ly would be much better for recipients of traffic from bit.ly.<p>As it is, the actual <i>producer</i> of the content being linked to has no idea where that link is on the web. Is it in a tweet? A blog comment? Where?<p>Bit.ly and other url shorteners are robbing content producers of valuable traffic information and giving it to the linker, but I would argue that it is much more important for the producer of the content to know who is clicking links and from where than it is for the person who links to the content.<p>This, of course, is one problem in addition to the increased layer of indirection and reduced reliability of content acquisition in the future due to the disappearance of the shortener.
They seem to be doing well, but just having good popularity data doesn't make you a strong digg competitor. People don't think of bit.ly as a destination site and that's not going to be easy to change.
A close parsing of this article ("filter massively for fraud", "flawed human voting system") suggests that Mr. Arrington is privy to some stuff about how digg works. Nudge, nudge.
I doubt people are using URL shorteners because they're bumping up against twitter's 140 character limit. It has become the trendy thing to do, and most non-technical users probably use it only because everyone else is. Anyone know where to find a large corpus of tweets? It would be pretty straightforward to do the analysis.<p>Additionally, why doesn't anyone talk about doing URL shortening on the CMS side? Sure the host portion of the URL might be a little longer than say 'bit.ly', but the remaining portion could be compressed. You could have a blog, news article, or whatever with an unobtrusive "twitter link" on the side. That way content owners still have some view into who is linking to their content.
I don't see this as a competition with Digg unless they also implement some sort of social aspect to it. I think a lot of people use Digg, Reddit and the like more for the conversation and community aspects than anything else.<p>The article posits the theory that Bit.ly, with access to more URL submissions a day has an advantage over Digg for that reason. I don't but it. The killer app of social book marking is as a filter. Bit.ly will still have to lick the filtering issue, just as other social book marking sites have had to. I just find it funny that the article seems to state that Digg receiving 20,000 links a day is a disadvantage when in reality, it's sort of the entire point of a service like that.
"...7 million URLs are shortened via [Bit.ly] each day, the company says, and 2-3 million of those are unique URLs Bit.ly has not seen before. Those Bit.ly URLs are clicked on 150 million times per week"<p>"20,000 or so new links a day are submitted to Digg"