I got a glimpse of Twitter's new native URL shortener for images. In a recent tweet by @dannysullivan he referenced an image of the home page for Bing with a Panda on it. As you can see from the below screenshot the image URL is pic.twitter.com/HowIUza (Not sure if this is truly the best shortened domain name for images shared on Twitter.) The image URL shortening service has not been released to the general masses as it is still in beta.
|Pic.Twitter.com - Twitter Image URL Shortener|
This seems to be bad news for twitpic (which some believe would be acquired by Twitter) and yfrog. But this just seems to be the next logical step in the Twitter evolution to harness the sharing/click data for their analytics dashboard (see Twitter Moves One Step Closer to Business Accounts).