Popular URL shortening site tr.im has quickly shuttered its service due to lack of revenue potential (our tr.im API profile). One of tr.im's creators, Eric Woodward, also referenced Twitter's choice of bit.ly (our bit.ly API profile) as a default URL shortener as factoring into their decision.
"tr.im did well for what it was, but, alas, it was not enough. We simply cannot find a way to justify continuing to work on it, or pay its network costs, which are not inconsequential. tr.im pushes (as I write this) a lot of redirects and URL creations per day, and this required significant development investment and server expansion to accommodate."
The user-facing service is being discontinued immediately. The tr.im home page contains only a message about the shutdown. The links themselves will continue to work through the end of 2009, though statistics may not continue to be reliable or available.
As for the API, an update post says the "API will continue to operate until further notice." However, with the service shutting down, keeping the API afloat is only to give developers time to move to a different service. We list several URL shortener APIs.
Picking a new service that will be around for the long haul could be difficult. There is no obvious monetization strategy for most URL shorteners, which simply forward users on to a longer URL. Of the many, it appears only bit.ly has raised any significant venture capital, but they also offer a host of useful value-added services beyond basic URL shortening.
Of course, any time you base your application on someone else's API you need to consider the stability of the service. What is it worth to the company to provide the service? If you are neither paying nor providing value, you could very well find yourself searching for a replacement.