Ning social network site is going from freemium to paid-for

Ning's new chief executive has announced that the site is going to shed staff, stop its free service and concentrate on its premium users. But it isn't the first to fail at the freemium approach, and it won't be the last Ning, which is the provider of this social network site and which lets anyone set up their own social network service, is slashing staff numbers from 167 to 98 and changing its strategy.

Recently-appointed chief executive Jason Rosenthal sent staff a memo that said: "we are going to change our strategy to devote 100% of our resources to building the winning product to capture this big opportunity" -- that being the premium service, not the one supported by advertising.  

"We will phase out our free service. Existing free networks will have the opportunity to either convert to paying for premium services, or transition off of Ning," added Rosenthal.

Over its life, the service has received about $120m in venture capital backing, but does not appear to have made a profit.

Ning ("peace" in Chinese) has been well regarded partly because of its chairman, Marc Andreessen, who led the development of the Mosaic browser and co-founded Netscape to replace it (hence Mozilla, a Mosaic-killer). His co-founder and former CEO at Ning, Gina Bianchini, also made a name for herself.

In a video interview published at last month, Bianchini said the next-generation Ning would be launched this year, and that the company was hiring. She was also happy to talk about revenue streams. She said about 13% of the user base paid for some premium services, and Ning also made money from "virtual gifts". As an example, she mentioned "bloody chain saws" being sold on the Lost Zombies network.

But the day before that enthusiastic interview was published online, Andreessen announced that Bianchini had "decided to step down after five and a half years of hard and terrific work".

Ning had banked on its user base expanding virally, and in his announcement about Bianchini, Andreessen claimed that ""Ning today is one of the world's top social networking properties, with more than 2.3 million user-created Ning Networks and more than 45 million registered users, and is far and away the market leading social platform for interests and passions."

However, in Eyeballs still don't pay the bills, a blog post at 37Signals (the company behind Basecamp, Backpack, Campfire, Writeboard etc), David Hansson
said: "Ning's problem is not a lack of eyeballs but its inability to turn them into cash money to pay the bills. Getting more of something that's a net-negative is not going to make up for it."

"The just-give-it-away-for-free-and-they-will-come-and-we'll-be-rich automatron is as broken now as it was in 2001."

On Andreessen's numbers, millions of users could now be faced with paying for Ning's service or abandoning the networks that have taken them so much time and effort to build.

This is a useful reminder that no free online service is guaranteed to remain free, or even to survive. Indeed, it's a fair bet that at least 90% will, in the long term,
disappear. Those lured with the bait of cloud computing should bear this in mind and make sure they have complete backups of all their data, plus an exit strategy for when the worst happens.

Article written by Jack Schofield -  Source:

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    Jens Mügge

    Dearest Ayla,

    thanks a lot for your response and thanks a lot for your feedback that you enjoy it to be a member of this network. Let me write you that I check daily what's happen on Ning, what 's new on the Blog Creators Forum. I am reading but I do not reply to any of these discussions on Creators. After May 4th Ning will gives us 10 weeks to accept the new conditions and the new prices. We can migrate our network if it needful to do that - or we can stay. But at this moment everything is quite unclear and there are some superactive writers on Creator who like to use their chance to promote their community software solutions. Some discussion are really not serious and not fair. I have thought about Drupal 2 years ago. MySpace is based on Drupal and and could be a fine solution. Joomla Community Builder - why not - or buddypress - yeah!!! There are so many systems and software solutions. I tested as well spruz and and signed it up - but they are not stable enough and their design and handling is horrible. Dolphin seems to be a good choice maybe ...

    But anyway - let us wait until May 4th when Mr. Jason Rosenthal will declares the upcoming company structure of Ning. It is time to re-think our common ressources. Hugs!
    Yours Jens
  • up

    Dear Jens:

    Thanks for all your ongoing work on the OMN site. And sorry about the extra stress this must be causing. Anyway, could you please post an update as it's now June 6th and we are anxious to hear what is happening. Thanks!

    Om . . .

    P.S. If you will be forced to charge a fee in order to continue the OMN site then count me in!
  • up

    Jens Mügge

    Hey Rain,

    I discussed this issue how to maintain OMN here with some members and I send a message about the new price systemon May 7th. Yes, now we have June 7th and i will send a new message to all members in three days. Until now I can't charge a fee in order to maintain this site because I have no collecting and control system integrated in the software of this site. In the next future I think I have to offer for all members a free basic membership and premium membership with all features. We are discussing details with the provider and I wish these upcoming changes will be fair and moderate for all members specially for those who are are member since 2007 and for those who supported this site with a donation.

    I will send a message on June 10th but there is no reason to be anxious to hear what will happen.

    All the best,