What is a small digital company to do when Google enters their market? Well, URL shortener Bit.ly isn’t planning to take new competition from Google lying down.

This week, the search giant announced that it was introducing a URL shortener Goo.gl. But before anyone could properly mourn Bit.ly’s loss of business, the leading URL shortener came out with a new product that just might fend off Google’s intrusion into its marketplace.

Google’s digital ambitions seem limitless, and more than a few companies have been taught the pain of free when Google goes after their business. This fall, Google introduced a free GPS product that has shifted the entire GPS business model closer towards free. Former market leaders have had to slash their prices to compete with Google’s product. And there’s no indication that such moves will really stop the bleeding.

But Bit.ly was prepared for Google’s
competition. Last night, the company revealed Bit.ly Pro, which will allow companies to
use custom urls for their links. The company also introduced a real-time
dashboard to let publishers track how and where their content is being

According to the Bit.ly blog:

“Users and publishers benefit from the additional transparency that this
private-label service provides.  When you see a short URL like nyti.ms,
you know the destination web site before clicking on the link.  The
service includes all the bit.ly features users and publishers have come
to expect.  Placing a simple “+” at the end of any bit.ly link
(including these white-label, bit.ly-powered links) takes you to
real-time information about that page and how it is being shared: how
many people clicked on that particular link, where they came from, and
more.  For publishers, the new service allows them to keep their brand
visible while maintaining access to bit.ly statistics.”

While this is a prime product to grow Bit.ly’s revenue stream, the company is not yet charging for Pro accounts. Like its deal with Twitter, this is meant to further cement its dominance over the URL shortening business. In November, the company shortened 2.1 billion links. That’s up from 11.8 million the year before.

As Twitter’s default shortening company, Bit.ly currently accounts for about three quarters of all short links on Twitter. Sites from AOL to Bing, Foursquare and The Wall Street Journal are among those in the private beta of the Bit.ly Pro program.

Meanwhile, both Google and Facebook’s new shortening service fb.me are ways for those companies to control data that passes through their sites. Facebook is using fb.me to shorten links on its own site and will also allow users to create their own links. Google will also allow users to create links to their own content. Both products have analytics tools that allow the companies to track online movement.

But Bit.ly’s product allows other people access to analytics. And lets them create their own branded links.

The secondary benefit of this is that it helps alleviate some of the security concerns involving short links. As PC World points out, shorteners make tweeting and other things easier online, but it’s impossible to know where short links point to, meaning that spam and malware are major concerns when using the things. Some services, like TinyURL, allow link previews.

Bit.ly’s customized links will now serve as a screening process for
websites. If you know that The New York Times uses the branded short
link ny.tms, you can feel safer clicking on links with that stem.

Another benefit is that Bit.ly will be able to sustain far more permutations of web addresses if it uses different stems for different companies. Now if the company can start getting brands to pay for the service, they’ll really have a winning strategy on their hands.

Image: Bit.ly