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Sharing links on Twitter can be quite a pain when you need to input a web address that consumes most of the space you have at your disposal for your micro-message. The startup realized that quickly and automatically started shortening long URLs to make its users save on space for their 140-character updates.

To get this implemented, Twitter went with TinyURL, a service that shortens URLs down signficantly (but not extremely) and at the time had been around for years already. It never gave a reason for this choice, but it did provide TinyURL with a lot of exposure and a lot of extra traffic.

Those days are over. Apparently, Twitter has silently replaced TinyURL as its default URL shortening service with bit.ly, a competing service that launched quite recently and not too long ago raised $2 million from several prominent angel investors.

This is actually not that much of a surprise. Betaworks, the startup accelerator behind Twitter related companies such as Summize (acquired by Twitter in July 2008), is also behind bit.ly, and it just happens to also count early Twitter investors and advisors Chris Sacca and Ron Conway as their investors.

Which obviously prompts this question: does the move signal Twitter paving the way for an outright acquisition of the URL shortening service provider?

[via techcrunch.com]