From SeoDigerati a nice and comprehensive list of web services that allows to make URL short.
In practice it means that a like for example like http://www.blablabla.com/test/prova it will be short in http://12345 (just for example).
The main advantage of the use of these services is the “protection” of the link itself, generally they are used to make links of download of the files (from one click file hosting sites like Rapidshare, etc…) that are posted in forums etc…
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