Using bit.ly is pretty easy, especially if you use tools to help you better manage the bit.ly workflow.

After signing up for an account, on your home page is a simple interface which allows you to enter the link which you would like to shorten.

After clicking the "Shorten" button you can copy the shortened link and paste it into your tweets, status updates on other social networking sites, etc.

All of the links you shorten will show up in the History section of your bit.ly home page. From there you can click the "Info+" button to see analytics for each of the shortened links. On the Info+ page you will see various statuses for the shorten link, including:

- The number of clicks via your shortened URL.

- The total clicks based on an aggregate link (which is a common bit.ly link for the long URL you had shortened).

- How many times the link showed up on Twitter, Facebook Shares, Likes and Comments, FriendFeed shares, etc.

- Charts of clicks by date/time, Referrer list and Geo Location for the clicks through your shortened URL.

If you use bit.ly for a while through the home page interface it quickly becomes tiresome. You'll want to check out tools to make your bit.ly usage a little easier.

For instance, one tool available to you via bit.ly is their sidebar bookmarklet. You can use it to bypass using the bit.ly home page interface for shortening URL's.

The workflow for the sidebar bookmarklet is this:

- While browsing the web you come across a URL you want to shorten and disseminate via twitter, facebook or email.

- Click the bit.ly Sidebar button from your favorites bar and the bit.ly Sidebar will appear.

- The sidebar shows the shortened URL and gives you a text box where you can type in a comment. From the sidebar you can then use the "Send to" links to send your comment and URL to e-mail, Facebook or Twitter.

Hope this helps.
Source(s):
http://bit.ly/
http://bit.ly/pages/tools
http://bit.ly/pages/faq/

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Bit.ly is one of many URL shortening services around. You can find others using:
- is.gd
- tinyurl.com
- twurl.cc
- tiny.cc
- ....

These services were introduced to save some space when dealing with long URLs which is especially useful when using it in combination with Twitter (since you're limited to 140 characters). Many twitter clients allow you to choose your favourite url shortening service and they automatically convert all the url's to the short ones.

The best way to use bit.ly (or any other) is to create an account (sign-up). This will allow you to track how many people followed your link, how many times it was retweeted, etc. It's a great way of measuring your online reach. Once registered you can provide your twitter client with bit.ly API key and username and start using it immediately.

If your twitter client doesn't support url shortening "addons" you'll have to paste your long url to the bit.ly site and shorten the url by hand. Once you have your short url you can copy it and use it on twitter, facebook, e-mails, ...
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