Twitter has its own URL-shortening service called t.co that was launched 2 months ago. And this news is from an email update sent to its users (you know the "inner scoop"); I just got it some 2 weeks ago. Here is how the service is described by the Twitter team:

"In the coming weeks, we will be expanding the roll-out of our link wrapping service t.co, which wraps links in Tweets with a new, simplified link. Wrapped links are displayed in a way that is easier to read, with the actual domain and part of the URL showing, so that you know what you are clicking on. When you click on a wrapped link, your request will pass through the Twitter service to check if the destination site is known to contain malware, and we then will forward you on to the destination URL. All of that should happen in an instant."

Back then, Twitter allowed a number of URL-shortening services that could be used by its users. The main purpose for such services was to to reduce a long URL string to a form that had fewer characters. Twitter used to allow a URL string of up to 40 characters to be displayed in its entirety but with the advent of these services, users saw a benefit in having shorter links in their 140-character-constrained tweets.
The first URL-shortening service to be used by Twitter was the TinyURL service. With this service anyone could shorten a link that was more than 40 characters. But Twitter dropped the service later and then chose the bit.ly service that strips the long URLs to 26 characters. Other URL shortening services can now be used on the site such as Google's goo.gl service.
Facebook's Twitter bridge appends a shortened link to a shared status update but this only occurs when the status update is longer than the 140 character limit of a tweet. The link usually has the format http://fb.me/xxxxxx that points to the particular status update on the Facebook page. NB: Facebook does not offer URL-shortening services.

Whether this service will be a game changer   in the long run is a matter that should be left to the test of time.