Ning Update: Phasing Out Free Services

[John McDonald]

Hi,

Today we made some changes at Ning.  I want to share with you the email Jason Rosenthal, our CEO, sent to all Ning employees:

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

I know many of you will have questions about this announcement.  We will share detailed plans within two weeks.

I feel confident that this change in direction will be very positive for our premium service customers because Ning will be 100% focused on delivering the features and services which benefit you and help you achieve your goals.

I will be here to answer your questions and respond to your concerns.   However, today I am focusing on my team, so there may be a delay in my responses.

Thanks,
John McDonald
VP Advocacy

[Jeff Lynn]

I also see this as a bad move for Ning. If they need/want more money, how is "getting rid of" all of their free network creators going to accomplish this when every when every free network creator is a potential premium member?.
I mean it seems to me that by getting rid of us they are loosing potential customers. Throwing away more than half of your user base is never a good business decision.

I think if anybody has a truly successful network that they have more than likely upgraded to one of Ning's premium services already or planned to in the future. It would have just been a matter of time as their network grew larger and became more successful.

I can understand Ning not wanting to foot the bill for all of the unsuccessful free networks, but I think they could have come up with better solutions to get rid of the smaller/dead networks that weren't going anywhere. For example, they could have put a limit on how many members a free network could have before having to upgrade to a premium service. Say any network with over 500 members would be considered a successful network and have to upgrade.

As an incentive to get successful networks to upgrade to premium services they could have rewarded them (stoked their egos) by giving them a successful owner's donations badge to display on their network congratulating them on their success and giving their network members a chance to make donations to help take their network to the next level and help it grow. To further encourage successful network creators to upgrade to premium services, Ning could have also added a web page to the main Ning.com site called " Top Networks", and listed all of the newest successful networks who reached the goal of having 500 members and offered viewers an option to sponsor a network by making a donation to help them upgrade to premium services. Kind of making it sort of a fun way of competing by rewarding your members and encouraging them to upgrade to your premium services.

Sound good? ... that's because I'm an idea man. Unfortunately some of the best and most potential online super powers like NIng lack creativity. I see it all the time and it is so frustrating to me to see them make mistakes that eventually lead to their death. Kind of like just what recently happened to Snapvine.com. That site could have been huge, but they didn't have a clue what to do with it ... so sad.

[celina[D]]

Indeed some very good ideas

[Janettee McCrary]

It does seem like we NC's come up with more creative ideas than they do:)

[Craig Zelizer]

Dear Colleagues
I have been running social networking sites for over a decade and previously had two IT companies develop customized sites for a previous nonprofit network. Both times the expenses was quite high, the functionality was very limited and in the end the sites imploded.
I am a huge fan of Ning and have been paying for the premium features since I launched the Peace and Collaborative Development Network, http://internationalpeaceandconflict.org
I do this site completely as a volunteer (although make a minimum amount from Google Ads to help with costs), and do realize Ning has to make money to survive and am willing to keep supporting reasonable costs.

However, I do not understand why Ning has to get rid of the free network feature since there are Ads on all sites and my assumption when someone doesn't sign up to sponsor their own Ads, Ning is making money off click on these networks.

It is also a bit shocking that Ning is laying off so many staff at once. Is this going to contradict the desired new improved service? One of the great things about Ning to date, has been that they are very responsive to problems (and you can communicate directly with support) and they are also soliciting new ideas from Ning Fans.

Is shutting down the free networks going to turn off many Ning fans and reduce the allure of Ning?

Also I am hoping that in the pricing models that come out that Ning does keep premium support affordable for smaller networks or volunteer ones like mine. Although we got a lot of traffic this is not a commercial venture, just an effort to make the world a better place and there are many similar networks run on Ning.

There is also the question is Ning in financially trouble at all or is this just an effort to ramp up revenue and review their core mission? Since the company is privately held, their financial info is not public (perhaps they are thinking about going public)? I do hope staff who are being let go will receive very strong compensation packages.

This also raises the question what is Ning's Corporate social responsibility policy in terms of staffing, environment, etc?

[Noajthan]

No more for free?! Dang I may have to get a proper job now

[christi pemberton]

Hey...I know that the decision is a lot to take in at one time. I wish that the decision was different, as when you give a person a chance to have a free network....they bring in their friends, and their friends bring friends, and you are building a community. In that community there are people who will pay for the upgraded features. Free users are valuable...my two networks are free to view. I am still developing a VIP membership for those who want unique and extra benefits...but those who do not want the VIP membership are still valuable, because they can still spread the word about the network and bring in their friends..who may become a VIP members.

My company's two networks and sites (http://diamondcinema.ning.com and http://gcstylenetwork.ning.com)
will stay with Ning.com...so if anyone wants to stop by, we will be here. We are about to launch a major Spring and Summer cross country tour of 5 of the hottest events in the nation to promote the best this nation has in the arts, innovation, and entertainment. So, we are going to be here and see what new things Ning.com will offer to the premium members to help us make our presence better for our viewers and members.

Here is my last point (at least for now):
Free or not, there is power in numbers, so there is power in a network that is building a good following (which takes time) -- this "power in numbers" thing builds influence and builds a strong voice for your brand or for whatever you are representing. If you got something good going, then that reputation will lead to money and resources..but respect. Respect is more powerful than money. See, if you lose money for whatever reason..then you have a community who will be "more eager" to help you out whether it is through a small donation or linking you to the right people to help you out. That "free" user, that you decided was valuable to you by joining your community, becomes even more valuable after all by "who they know and what they know". I have seen this quite a bit. You never know what that free member, or free network, can do and what they can get for you. It all comes down to "how you use" this "free human capital".


Christi

[Sports Hypnotherapy Glasgow]

What level!!!!!!!!! Where do you think you will be flying too misswings LOL

[Tammy Moore]

I have often looked at the premium services because I am grateful to Ning for providing this service (though I must admit to frustration over the last few weeks about getting blocked out of my own networks for 5 days), but since my Nings are not business Nings I really didn't have need of the no ads, domain name, more bandwidth, premium support, etc. I figured, well, Ning is doing OK and I don't really want these premium services, so I didn't purchase anything.

But, now that the shock of the news has worn off, I am here to tell you that I do consider Ning a friend to me and all I need to know is that Ning is in trouble and I will even buy a service I don't need to help my friend. I may not have much that I can spend because I will be digging into our one-income family pocket, so I am anxiously awaiting their announcement as to what price structures they will put in place. I have already set my priorities as to what I hope to keep and what I can let go of as far as my networks go. I will keep what I can and hope that it is enough to keep Ning alive as others do the same.

[Lester Unega Waya]

By turning down income from google adds, Ning have to make up that loss of income from the paying
members.
But paying members pay to be add free, so nothing will change there, it will probably just cost them more to be add free because of the loss of income from google adds which the free sites were bringing in by displayinggoogle adds.
Ning could have still concentrated on the paying sites without losing the free sites.
The idea that the sites that remain are going to spend fortunes paying for all the different gadgets that Ning are going to offer them sounds good in theory, but in the light of the economic climate, may not be practical.

[Alan]

When you take all the emotion out of the picture, I think that for the creators of currently free networks, the issue boils down to: How much do we need to pay to keep our networks?

I've got a small (but active) network of about 100 people right now. It's social, not business oriented, so I imagine it's going to stay relatively small. So if I need to pay $10 a month to keep it, I can do that without a moment's hesitation. If it's going to be more, then I need to know how much, what is the likelihood that fees may increase at some point in the future and by how much, etc.

I'm guessing that the fees might be relative to the size of the network. If so, when the fees are posted we (the creator community) are going to need to know what we get for our fees in terms of support, bandwidth, storage, etc.

Most importantly, if Ning is going to go fee-only (no judgment, it is a business after all), then you REALLY need to provide the creators with a tool to monitor storage and bandwidth usage. I need to know what my community is using in order to assess the needs of the group. If we need to buy additional storage/bandwidth because we need it, I need a monitoring tool to tell me we're getting close to the limit and how much we're growing, so I know how to plan.

Hope that helps someone on the decision-making team.

[Eric Suesz]

Great points, Alan. Definitely passing those on. Thanks!

[sol mali]

i really have no idea about this-- my networks http://southcot.ning.com never uses our own domain? please help me how can i have my own domain, i am not really into developing sites, i really have no idea how to do this, besides i have no budget for own domain registration, i developed mine just for fun and now close to 2,000 members is on my network, i dont have any credit card or paypal account to use for paying online, i think one option i could possibly resort to is selling out my network to interested parties contact me at [e-mail] or visit http://southcot.ning.com help me.