The social networking network, Ning, has just announced that it will no longer provide any free services to users. This will most likely mark the (not too slow) demise of what was an excellent social networking service.
Even though Ning is believed to have over 20 million visitors a month, and had 1 million uniques a year ago, things obviously have not been going too well for them.
They have announced large scale staff cut-backs following a change in leadership – their previous CEO Gina Bianchini left the company last month and Jason Rosenthal has taken her place.
Ning was valued at $500 million one year ago, based on their then-proclaimed user numbers and estimated ad revenues. Rosenthal decided that they need to re-evaluate their working systems. After studying the business, he concluded that they needed to focus on their premium services business.
Premium Ning Networks drive 75% of their monthly U.S. traffic. Network Creators who use these services will need to pay for many more services and features. They are, therefore, going to change their strategy to devote 100% of their resources to building the bread-winning products.
Ning will phase out free services shortly. Existing free networks will have the opportunity to either convert to paying for premium services or move away from Ning.
In effect, paying customers will be required to pay higher prices and free customers will have the choice to either start paying for services or leave Ning and move their networks over to other sites.
Users on the Ning Creators forum thread where this announcement was made have already started talking about leaving Ning. New threads have cropped up listing a number of viable options, which currently include Grou.ps, Spruz, SocialGO, BuddyPress, Lovd By Less and Elgg.
While it makes sense that those who use Ning to build full-fledged networks for their users should invest in the service, a vast number of networks have been created on Ning only because it was the best free alternative. Most of these networks do not have a financial reason to exist, and when Ning shuts down their free service, they will leave the network in droves.