Possible Duplicate:
How do short URLs services work?
I often see shortened urls from bitly.com such as http://bit.ly/abcd. How is this “bit.ly” realized at server side? Is it some DNS trick inside?
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Yes.. actually if you go to https://bitly.com/ you will notice that it provides this URL shortening service.
Going to http://bit.ly/abcd just redirects it to a URL of your choice. You can figure it by looking at the HTTP request and response headers
http://www.w3.org/Protocols/HTTP/HTRESP.html talks about status codes and 301 is what you should be looking for