The Ning Train Wreck

When build-your-own-social-network company Ning appeared on the scene I created three networks – IntelliCAD.net, ProE.net and AlibreDesign.net. I built these as independent social networks where CAD users could discuss issues, seek and give help, blog, post images, videos, etc. The idea was that Ning would build the software and host these networks for free. In return it placed Google ads on the networks whose revenue it kept. It also offered some premium services like using your own domain name instead of a Ning subdomain. For example, I paid Ning $5 a month to host IntelliCAD.net at www.intellicad.net instead of http://intellicad.ning.com. There was even an option of paying Ning $25 a month and keep the ad revenue. But that made sense only for networks with a large amount of traffic.

Things went well for Ning for a while. It managed to raise around $120 million and got itself a valuation of $750 million. Then the shit hit the fan. First Co-founder and CEO Gina Bianchini was replaced by COO Jason Rosenthal. Announcing her departure on is blog, Ning Chairman Marc Andreessen reassured people by saying “nothing else is changing”. That turned out to be a load if crap because a month later the new CEO laid off 70 employees. In an email to the company announcing the departure of 40% of the head count, Jason wrote:

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.

And just like that he decided to turn off the tap on the free social networks that people spent a great deal of time and effort creating, managing and promoting. In March this year Ning announced that they crossed the 2.3 million mark. Yes, that’s 2.3 million user-created social networks! Just imagine the number of members in those 2.3 million users. My ProE.net alone has close to 450 members.

After the announcement, there were 2.3 million pissed off network creators, who were now being asked to shell out money every month to have their networks hosted. Clearly Ning’s business model failed miserably. Even 2.3 million social networks could not generate enough ad revenue to keep Ning’s investors happy. Eventually they got fed up of giving away stuff for free and decided that people pay up or get off their property. Ironically, the whole point of Ning was to get as many people as possible on their property. The company had initially predicted that by New Year’s Eve 2010, they would host some 4 million social networks, with tens of millions of members serving up billions of page views daily.

By midnight tonight, if Ning network creators do not sign up for a monthly plan, their networks will be taken down. I am curious to know the new number of active Ning networks after midnight. Also how that number changes over time. I have signed up for one of Ning’s monthly plans for each of my networks, the $20/month one. Spending $15/month for using my domain names for my networks was one thing. But shelling $60/month out of my own pocket for having Ning host my networks is quite another.

I could ask members to donate money and help keep the networks running. But I believe, things like these should be free or should pay for themselves. The idiots at Ning are trying to sell the idea to network creators that $20/month won’t be that much because they will now get to keep all the ad revenue from their networks. I find that stupid because if Ning, with 2.3 million networks in its control, resulting in millions (if not billions) of page views every day, could not find a way to make enough money off Google ads, then what chance to individual networks creators have? In fact, the reason Ning is pulling the plug on free networks is because the idea of serving ads failed.

Facebook’s ad revenue is expected to exceed $1.2 billion this year. The company appears to be doing a pretty good job running itself. It’s a pity that Ning appears to be going in the opposite direction. After all, the internet may be limitless, but there are a finite number of internet users and they have far more important things to do other than clicking on Google ads all day.

Some people are now recommending that network creators take their networks to other free Ning alternatives. I don’t consider that to be a wise idea because what is the guarantee that they will not end up in a similar train wreck as Ning?

I am looking currently looking at moving my networks to the open source WordPress and host it on my own dedicated server on which this blog resides. There is a WordPress add-in called BuddyPress. I gave it a try today, but something went wrong while importing my Ning network content. I think it was an issue at my end though. If I manage to get it to work, maybe I will post a sequel with instructions on how to move a Ning network to WordPress with BuddyPress.

Meanwhile, if any of you have other suggestions, please  leave a comment. One thing is for sure. Pretty soon, the number of Ning networks on this planet is going to be reduced by three. 😉