Peter Stern, Bitly's (now-former) CEO. (linkedin.com)

Sometimes Silicon Alley can make your head spin: out of the blue, in a terse blog post, Bitly just announced  that CEO Peter Stern has resigned in order to "pursue other interests."

Say what?

The announcement, which clocked in at a mere 61 words, had just this to say about Mr. Stern's tenure:

“Peter has been a key leader and contributor to the Company,” said Bitly Board member Sam Mandel. “In particular he has been instrumental in transforming Bitly into a successful business while growing its unparalleled data set. We are very happy that he will remain a shareholder and supporter.”

After a lengthy effort to raise funds, the company announced a $15 million round from Khosla Ventures in July, bringing its total raised to $28.5 million.

When Twitter got into the link-shortening business, Bitly insisted its strength was really in metadata. Concurrent with fund-raising, the company was working on a revamp that focused more on getting consumers to subscribe.

This January, Bitly debuted three new social data APIs and better search functionality. Chief data scientist Hilary Mason promised: “You can expect to see much better stats for consumers that will draw off of this data, as well as better discovery tools on the enterprise side and audience analysis tools.” The company's revenue depends on selling insights from consumers to enterprise clients.

We've reached out to Mr. Stern for comment and will update if we learn anything more.

UPDATE: Betabeat has heard that the reason for Mr. Stern's departure was related to a difference of opinion. According to a source familiar with the company, Mr. Stern was interested in moving Bitly more toward an ad-tech business. There are a number of ad-tech companies interested in using insights about sharing and consumer intention as an extra edge in arbitraging data sets.

However, Bitly's management team and board felt that approach ignored Bitly's growing data trove and its potential as a social media platform for data analysis. As Bitly noted in a blog post just yesterday, the company has been "nearly 100 billion human beings clicking on bitly-powered links."

Mr. Mandel, a longtime Bitly board member and former EVP of business operations at Tweetdeck, will act as interim president, with Ms. Mason and Peter Miron, SVP of engineering at Bitly, rounding out the company's key players. They will move forward in trying to monetize the metadata Bitly collects in a way that makes sense for consumers and brands. Their goal will also be to accelerate launching new products.

According to the source, Bitly sees itself as part of the social infrastructure in large part because of its 20,000 to 30,000 API partners, like The New York Times, Amazon, Foursquare, and even the U.S. government.

Mr. Stern (Photo: LinkedIn)

Bitly CEO Peter Stern, who once told Betabeat he's been in the process of raising funds ever since he joined the company, finally has a milestone to announce. The company has raised a $15 million Series C led by Vinod Khosla at Khosla Ventures.

"[Mr. Kholsa] has been fascinated with the growth of Bitly all along," Mr. Stern said by phone this afternoon. "Fascinated with this kind of invisible glue that enables people to share in social media and the insight that you can extract from doing that at scale and thinking about what kind of services and products you can offer consumers to grow that set even more."

Mr. Stern said he has been in contact with Mr. Kholsa for a while. A Series C has been expected since Bitly raised a $1.4 million convertible note in March. Previous investors RRE and OATV also participated in this round.

The round is focused exclusively on Bitly's consumer offerings, Mr. Stern said. "On the business-side we continue to have record month over record month, but this raise is not about the B2B side. This raise is about giving us the runway to grow Bitly as a consumer service much faster than cash flow would allow."

In May, Bitly released a major redesign--transforming its utilitarian link-sharing and tracking service into more of a consumer-focused curation and discovery platform. (Some kind of expansion was expected after Twitter announced automatic link shortening with t.co last year.) The Internet lashed back--as it is wont to do--with a hair-trigger criticism; Bitly swiftly responded, reinstating its one-click link shortening.

It seems the redesign gamble has paid off. Since the end of May, daily consumer registrations have increased by 300 percent. "I think we made Bitly more relevant for a wider set of people," Mr. Stern said.

But don't expect him to gloat with vindication, at least not to a reporter. "The backlash was very regrettable because we love our customers and we changed a lot on them on a Tuesday morning after Memorial Day," he said. "But if you look at the tweets you’ll see a lot of the people who originally tweeted [their disapproval] a few seconds later tweeted that they actually liked what Bitly was doing." Hmm, we must've missed those ones!

Bitly monetizes exclusively with a paid option for business customers, not advertising. The long-term plan, said Mr. Stern, has stayed the same: "Grow Bitly as a consumer service where people use it to collect and share and organize content--and from that massive set of interactions, find actual insights that we can package and sell to business who understand what audiences are interacting with."

Even with just two product people and a few sales people dedicated to the enterprise side, the B2B front has still managed record record sales for the past three or four months, "with its very exciting and interesting, but not rapidly growing product," he said.

The Series C will be spent on hiring to help Bitly build more consumer products. "And we’re gonna buy a giant statute of me!" said Mr. Stern. "No, just kidding. Total joke."

The little company seems to be ramping up--about two months ago Bitly announced it had hired Matthew Rothenberg of Flickr as VP of Product.

"Bit.ly Hir.es Peter Stern as C.EO http://j.mp/lSM8oq <~ Word is he J.mp'ed at the gig," Andrew Nystrom joked on Twitter.