When we started bit.ly, about a year ago, I had a very strong idea of how we'd make money with it. Unfortunately bit.ly never got there. Now a couple of new shorteners are doing it, so I want to tell the story.

Like a lot of other developers I'm hooked on Amazon. It started with their storage system, S3. Now I use EC2, and hope to find an application for SimpleBase. I'm using many of the other smaller features of their cloud. It's great stuff.

However, there are a couple of components I'd like to see added to Amazon's cloud.

1. Internet-level notification. I'd really like them to offer the basic notification facilities of Twitter. See this piece that says that like it or not Twitter is becoming an essential part of the infrastructure. It's true. We need them to have competition, and it should come from Amazon, and many other places.

2. URL-shorteners. They're a fact of life. But I should have my own shortener at my own domain, so I control the future of the URLs. That way if the service I use should go down, I could switch to another. I also want to generate stats from the URLS.

Bit.ly was supposed to do #2. My plan for the developers went like this. When you have a question how to do something, do it the way Amazon does it. I want the API to be like theirs, the docs, and most important -- the pricing.

If Amazon did a URL-shortener, they would charge by the URL, and they would charge for each access. The prices would be very low, but they would add up. The same way they do it for S3 and EC2. Bit.ly was to be the URL-shortener that Amazon would have made.

Now today I learned of two URL-shorteners that are offering to host domains for you. One charges a flat rate of $49 per year and is available today. Another promises to do it for free, but it's available soon.

Watch this area closely, it's important.