I've just upgraded my Google Toolbar on Internet Explorer 8 and have found the Google URL shortener http://goog.le/ integrated within the 'Share' functionality.
So, does the Internet need another URL shortener? Possibly not.
But is there any harm in Google doing one? Possibly not. It was likely cheaper developing their own one than buying up http://tinyurl.com/ or http://bit.ly/ (the default URL shortener for Twitter), but not that Google needs to worry about money.
Here's Google's blog post from December on the launch of this service:
http://googleblog.blogspot.com/2009/12/making-urls-shorter-for-google-toolbar.html
Coincidentally I was having an interesting conversation with one of my clients yesterday about the SEO (search engine optimisation) implications of URL shorteners. A check with this URL shortener article by Danny Sullivan does corroborate the fact that a lot of these services allow shortened links to add to your SEO efforts (by correctly using 301 redirects) .
On top of this, its my belief that creating a bespoke URL (e.g. http://www.tinyurl.com/keyword+linkid) could further add to your SEO efforts by including your required keyword(s) into the URL as we know that keywords in hyperlinks can increase the relevance and therefore the value of each link.
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