Ning is ending its free social networks service and forcing all of the free network users to either upgrade to a paid service or get out. This is going to cause major blowback for the company in the real social media sphere (facebook, twitter, and blogs).
Ning is going to find itself dead in the water rather than increasing profits. The better way to handle this would have been to make the premium services more appealing and leaving the free networks as they are, or not allowing any new free networks while leaving the existing free networks alone. Yanking the carpet out from under your users is always going to work out badly.
I for one am going to let my Ning networks die. I’m also out of reasons to suggest that anyone use Ning instead of just setting up a facebook fan page. The Facebook fan pages grow faster and instantly appeal to people already invested in a strong social media platform. Ning can’t really stand up against that if they’re not getting the added buzz of providing free social networks.
Jason Kincaid posted a copy of the letter that Jason Rosenthal sent out to the Ning 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.
I’m sad to see Ning go out like this, but I can’t see how it will survive with this new model.