The name for a URL that's been shortened by a Web service so as to allow a user to post a link to a long URL in a condensed space.
The need for shortened URLs began with Twitter, who limits posts on their microblogging site to 140 characters. If you want to say something about a Web site and include the link, it will cost you precious character count. Since it doesn't take too many words to exceed the limit, the result has been a boom of free services that reduce URLs to around 15-20 characters or less.
For example, on the NetLingo Twitter account, instead of posting this (which is 162 characters and thus over the limit): Today's business word of the day: Web 2.0 - read it & learn something new, you need to know it by now cuz Web 3.0 is next! http://www.netlingo.com/word/web-20.php
I can post this (which is 140 characters): Today's business word of the day: Web 2.0 - read it & learn something new, you need to know it by now cuz Web 3.0 is next! http://ow.ly/dyAD
Essentially you copy-and-paste any URL into the search box on one of these free Web sites and it will instantaneously return you a very short URL you can then copy-and-paste anywhere. The short URL will take users to the same long URL you initially shortened.