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Ning Is Dead; Well Not Quite…

Posted by on Apr 20, 2010

Ning is a social media site where people can create groups and invite people in to talk about tons of different topics. Of course, just because something seems like a good idea doesn’t mean it will work, and I wrote about my disappointment in Ning back in January after being a part of it for what I consider a long time.

This weekend is was announced that Ning will no longer be free, at least for people who create groups, and probably for people who still want to participate with them. I say “probably” because Ning hasn’t announced yet how they’re going to do things. What they did say is that 75% of their users are already paying for the service in some fashion, so they’re just consolidating the other 25%.

Based on comments I’ve seen on both their blog and other forums, that 75% figure seems to be a great exaggeration. Not only that, but they’re announcing these changes at the same time that they’re cutting staff. All of this comes with the new CEO of Ning, Jason Rosenthal, and was pretty much outed by an employee through a letter Rosenthal sent to all of them. Seems they don’t much like it either, obviously. I read a copy of the letter on the Ning site Property Tribes, but since I’m expecting it to not be there all that much longer, since this guy is a VP of the company and, by posting the letter could have potentially messed up his employment there, here’s a copy of the letter, which is all over the place by now:

Team,

When I became CEO 30 days ago, I told you I would take a hard look at our business. This process has brought real clarity to what’s working, what’s not, and what we need to do now to make Ning a big success.

My main conclusion is that we need to double down on our premium services business. Our Premium Ning Networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others both drive 75% of our monthly US traffic, and those Network Creators need and will pay for many more services and features from us.

So, we are going to change our strategy to devote 100% of our resources to building the winning product to capture this big opportunity. 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. We will judge ourselves by our ability to enable and power Premium Ning Networks at huge scale. And all of our product development capability will be devoted to making paying Network Creators extremely happy.

As a consequence of this change, I have also made the very tough decision to reduce the size of our team from 167 people to 98 people. As hard as this is to do, I am confident that this is the right decision for our company, our business, and our customers. Marc and I will work diligently with everyone affected by this to help them find great opportunities at other companies.

I’ve never seen a more talented and devoted team, and it has been my privilege to get to know and work with each and every one of you over the last 18 months.

We’ll use today to say goodbye to our friends and teammates who will be leaving the company. Tomorrow, I will take you through, in detail, our plans for the next three months and our new focus.

Thanks,
Jason Rosenthal

Doesn’t sound good to me. I can’t even say “good riddance”, since I cared little for it anyway. Your thoughts?

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15 Comments »

Monique:

I guess I was never on the Ning train. I never felt really comfortable with the interface. I always preferred SocialEngine PHP. One day I plan to launch my own network and I never considered Ning for that project. I guess because of the plugins and the similarity to Facebook. That’s just my preference.

April 20th, 2010 | 8:53 PM
Mitch:

Hi Monique. I never thought it was even similar to Facebook, but now that you mention it, there’s not all that much more conversation there. And I know you’re working on a paid model of some type; that’s the only way I’d launch my own network, so to speak.

April 20th, 2010 | 9:57 PM

Good morning, Mitch.

As you may remember, I have two communities on Ning for which I have been paying for premium services for over a year, and I like them and will try to keep them running.

One of them has a sponsor that pays the monthly costs and the other is paid for by several local businesses.

During my illness and hospitalization, the participation has declined, but I hope to bring them back over the coming months.

I think going to a paid model is a good move for Ning. The great majority of their free communities never had much participation and quite a few were essentially free links to whatever the community creator was selling or promoting.

With the growth and increased popularity of Facebook, I think it is a better choice for most people who would have wanted a free community on Ning, and that frees up staff and resources at Ning to support the paid communities.

There are still plenty of places where people can create free sites, so I don’t think Ning’s changes will be all that problematic for people who want free sites, but I do think that it illustrates, once again, the dangers of depending upon free sites for promoting your business, organization, or other agenda.

As far as 75% of their users being paid members, I don’t think that’s what they said. I interpreted it that 75% of their traffic was generated by the premium-paying communities, which indicates — to me — that those communities had more participation and the majority of non-paying communities were much less active. Less-active sites means less ad views and less revenue. Therefore, the paid sites were already generating the majority of their income, through ad revenue and premium services revenue.

It sounds to me like they’re dropping the part of the business that wasn’t paying its way and focusing on their best customers in order to give them more of what they want and are willing to pay for.

I don’t see that as a bad thing, at all.

All the best,

JD

April 21st, 2010 | 12:48 AM
Mitch:

Hi John,

You could be right on many of these points, but knowing that even some of the employees of Ning were upset with the changes just makes me question things a little bit.

As for the 75% thing, you might be interpreting that one correctly as well, but I don’t understand why a paid model would bring in more traffic. Does that mean that all the members pay to participate? If that’s the case, then I think it says there aren’t a ton of members overall who play on Ning. If it’s not the case, then what is it that a paid person or group does on Ning that brings traffic and participants in that doesn’t work for the free groups?

April 21st, 2010 | 1:44 AM

Good afternoon, Mitch.

I’m not entirely sure I’m right, it’s just the way I’m interpreting it prior to their official announcement.

I think employees are always upset when new management takes over and change is in the air, especially when downsizing of the staff is concerned. I know I’d be upset in those circumstances.

I don’t know of any Ning communities where members have to pay to participate, but that doesn’t mean there aren’t any.

The paid model, as I understand it, means that the community creator pays for certain premium services, for example: to control the ads; to use a domain name rather than ning.com subdomain; to purchase more storage or bandwidth; and there are several others.

My guess is that someone who is paying monthly to build a community may be more dedicated to promoting it and stimulating discussions and other interactions. That’s just a guess, though.

Many of the free sites are rarely visited, even by the creator. There are also many that I’ve visited where the creator is non-responsive to forum posts or even direct messages.

I know, on some popular communities, the creator is aided by admins and moderators who keep things moving and stimulate further interactions among the members. Some are volunteers and others are paid.

I’m sure that there are other factors involved, but that’s all I can think of at the moment.

On the surface, this seems to be contradicted by the success of Facebook, but building a community on Ning is not the same, although they are similar.

All the best,

JD

April 21st, 2010 | 5:45 PM
Mitch:

Hi John,

In other words, Ning is like blogs, where paid blogs seem to be able to generate more activity because we’re more apt to want to make the experience better since we’re paying for hosting and putting up our own ads. I had more to say, but decided it wouldn’t be fair across the board. lol

April 21st, 2010 | 6:31 PM

Hi Mitch,

Yes, I think that’s true, for the most part.

No, it’s not a fair statement in all cases, but I think it is mostly true.

All the best,

JD

April 21st, 2010 | 6:41 PM
Dave Doolin:

I’m going to be moving all my data for a small network off of Ning and on to Facebook. The Ning platform never caught fire with my group, so I couldn’t see paying for upgrade to premium.

I think it’s the right thing for them to do though. A lot more web services should be for-pay. Businesses need to make money, and people value what they pay for more than what they get for free.
.-= Dave Doolin´s last blog ..hRecipe – Semantic Recipes for WordPress (Google loves these) =-.

April 22nd, 2010 | 2:41 AM
Mitch:

Hi Dave; welcome. I don’t disagree with them going paid, but I’m with you, the site’s just never given me anything that’s made me want to stay, let alone pay. Value; that’s all we really want.

April 22nd, 2010 | 10:42 AM
hospitalera:

I signed up with Ning as they started, but then decided not to use them simply I felt not comfortable of building a community on a platform that I not fully control. What if they decide suddenly to charge more then I am willing to pay and / or decide that they don’t want to host my community anymore? Whilst there setup is neat, I would prefer to have a forum + Tiny Portal or similar set up on a web site I host myself. SY
.-= hospitalera´s last blog ..Improvements on Ceramic Sinks =-.

April 24th, 2010 | 11:01 AM
Mitch:

I’m with you Sy. Actually, it’s kind of a worry about Facebook, to tell you the truth. If they decided to suddenly start charging $10 a month, we’d be shocked and stunned and not know what to do with ourselves, especially if we hadn’t set something else up.

April 24th, 2010 | 11:43 AM
hospitalera:

Lol, or it would save us from ourselves and avoid that we loose time with the silly games and apps. 😉 SY
.-= hospitalera´s last blog ..Improvements on Ceramic Sinks =-.

April 24th, 2010 | 11:48 AM
Mitch:

True, but oh what fun! lol

April 24th, 2010 | 11:52 AM
Rose:

As you know I was never a fan of Ning so good riddance to them.
.-= Rose´s last blog ..Daughter suffers from Borderline Personality Disorder =-.

April 26th, 2010 | 1:46 PM
Mitch:

Yup, I remembered, so you and I are on the same page with this one.

April 26th, 2010 | 2:59 PM