Twitter, in yet another step to outdo third party competition, introduced its own URL shortner on twitter.com. When you place a link in the update box on twitter.com, it automatically shortens it to 19 characters when you hit “tweet”. You no longer need an external URL shortner like bit.ly or even a third party app that does it automatically like Tweetdeck, when you want to shorten a link.
Shortens links to 19 character versions of the original
The way Twitter shrinks the link still allows you to see the site that the link points to. The smaller version is just a shortened version of the original link, even though it's assigned a t.co link ID. Twitter also looks to make link sharing more secure. If you click on a link that has been reported to be malicious, Twitter will send you to a warning page, before taking you to the linked page itself. If however, you want analytics for the links you post, you can still use third party link shorteners like HootSuite's.
UPDATE: The automated URL shortening doesn't work for some users yet (after repeated testing on both the old version of Twitter and the new version).