Ning–the popular service allowing users to build their own social networks,–is making massive staff cutbacks, increasing its fees for premium services, and cutting off its free services. All Ning users who have been getting their social networks for free of charge will now be asked to start paying fees or phase off the Ning platform.
Ning claims more than 46 million users spread over 300,000 social networks. The vast majority of its users are non-profits and other small groups who rely on Ning’s free service.
When the company announced April 15 that it would shift to an exclusively subscription-based model, it said the needs of its free and paid clients were so different that it had to choose one of the groups to be its focus. In the words of Ning’s new CEO, Jason Rosenthal:
“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[…] drive 75% of our monthly U.S. 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[…] All of our product development capability will be devoted to making paying Network Creators extremely happy.”
This is not the first time that non-profits relying on free Internet services have been burned. Last November, Causes, a fund-raising application, stopped working with MySpace, deleting users’ content and communications. Ideablob, a service that created a platform for people to discuss business ideas and awarded cash prizes to the most popular ones, also shut down last November when its parent company filed for bankruptcy. Neither Causes nor Ideablob alerted registered users about their sudden shut-downs.
Ning, however, has alerted users they need to start forking money over for its premium services or prepare for being shut down. Ning’s premium fees include custom URLs at $5 per month, customer support starting at $10 per month, extra bandwidth and storage at $10 per month, removal of Ning links at the bottom of pages at $25 per month, and an ad-free interface at $25 per month.
UPDATE: Ning announced May 4, 2010, that it had signed a letter of intent with a major educational publisher to keep its service free for educators. Teachers will be able to use a new product called, “Ning Minis,” but it’s unclear at this time what kind of control the company will have over Ning Minis and how much advertising they will contain.
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