What bothers me about the whole tr.im story is that they are basically complaining they are losing money hand over fist at the same time that they are saying that twitter will send their traffic to bit.ly.
So, what's the problem then ? Seems like your cost just went down, you should be happy about it, not complain.
If you can't make money at traffic level X because the model you are pursuing is broken then at level N*X you are in much worse shape. And yet, they seem to want to be in much worse shape...
With the caveat that I found the general whiny tone annoying:
Direct costs may go down, since they have less URLs to worry about. But value goes down as well, since they have less data to mine. There may be some critical mass of data required to have anything of value.
They're complaining about development costs and bandwidth costs.
I don't buy it.
A url shortener is relatively trivial to operate (at least, compared to some of the stuff I'm doing right now). It works, or it doesn't, once you've got it there isn't much you can do to make it better or add features.
So development costs are almost a one-time affair and it seems they had already done that.
What's left is the bandwidth cost.
A Mbit is about $5 /month in bulk. The average 'GET' reguest from a device is maybe 500 bytes, the answer, the redirect is maybe another 500 bytes. So say 1 Kbyte in total (generous!). 1Mbit / sec = 128 Kbyte, so that is roughly 100 requests / second for $5 /month. Serverload is trivial, a single table with a unique key, you can do 1000's of queries like that per second on a single box. It is a trivially parallel problem, simply distribute all urls across all machines. A single box could push maybe 100K requests / second using varnishd or some other front end cache (tr.im uses nginx), so that's maybe 800Kbit/sec out of one box.
You'll need a bunch of IPs otherwise you'll run out of sockets and you'll need some memory for the cache.
Calculate in some margin and you can cut that down to maybe 500 Mbit/sec, so that box would cost you $2500 / month and it would handle a staggering 62500*86400 = 5 billion requests / day.
No way tr.im is at that level, more likely a few tens of millions of requests per day, reduce bandwidth costs accordingly, say $500 to $1000.
It wouldn't take more than a bunch of google ads displayed to the makers of the urls or a donation to keep a service like that going, that's not a whole lot of $ to make on a site. One of my sites which converts absolutely horrible does that kind of money on 27000 visitors / day (mostly from Finland, don't ask...).
This will never be a business, and personally I really don't understand why the likes of twitter do not give a short url out on their own service. But it also does not cost a fortune to run, that's bs.
And if you want to create 'value' you should do something a little more sticky than a url shortener, it literally is a throwaway relationship with your audience.
And if you lock them out for a couple of days because you can't make up your mind if you're going to sink or swim you have really tossed your investment into the water.
They also seem to make it appear as if they are doomed because of the close relationship between twitter and bit.ly. Is twitter the only way URL redirectors can grow? Aren't there any others who want to do a one-up on twitter and can potentially use tr.im (facebook??) if they offer challenging reasons?
Secondly, if they have no business model, and they do not have any connections, they dont seem to have any options!
There doesn't seem to be much of a use for URL shorteners outside of twitter. Facebook statuses are much longer, and might just deal with embedded urls anyway.
So, what's the problem then ? Seems like your cost just went down, you should be happy about it, not complain.
If you can't make money at traffic level X because the model you are pursuing is broken then at level N*X you are in much worse shape. And yet, they seem to want to be in much worse shape...