Monday, April 19, 2010

Ning's Free Promise

Ning has me torn.

I was all set to pen a post with plaudits for Ning’s decision to discontinue its free service, demanding the social networks hosted on its platform move to one of the company’s premium offerings or relocate. Here was a Web 2.0 company that was finally getting hip to the realities of maintaining a financially viable organization.

About a year ago on this blog I pleaded with Facebook and Twitter to charge users for access to its service as a means of establishing multiple streams of revenue. I argued that an advertising supported model alone would not ensure the long-term economic viability of either of these companies.

Plus, it was important to disabuse consumers of the notion that they are entitled to free and unfettered access to nearly everything on the Web – information, infrastructure and other resources. Our capitalistic society is based on a simple concept: you pay for what you consume.

However, a well crafted and thoughtful post about Ning from Shel Holz got me thinking. My previously stated view about Web 2.0 and capitalism stands up in this situation except for one glaring factor – Ning made a promise of free to its users.

In fact, as Holz correctly points out, free access was at the very core of Ning’s value proposition.

Ning now has a big-time trust issue. Yes, the community managers who have to cough up a monthly fee or deal with the hassle of moving to another platform will certainly be bitter. They were the free-loaders and of limited value to Ning.

More worrisome is the trust gap that may now form between the company and its paying customers, its employees and its partners. Anyone who does business with Ning would be well served by maintaining a level of suspicion about the policies and decisions that come from the company’s management.

2 comments:

James Wallis Martin said...

The value proposition of Ning was the ability to have a forums, chats, file sharing, etc. instantly without having to reinvent the wheel and host on one's own website. The hope was that people using it would see the value.

The problem lies in the ability to get traffic to such sites and to get people engaged. With no APIs and only email notifications being sent, Ning did not compete with the other services that allowed apps such as Digsby.com to interface in such a manner that people can tune in or tune out to activities on a Ning site. Most people hate their inbox getting cluttered with email notifications and to have to login to see if others are there is also a pain. End consumers of media don't expect it to be free, but they do expect it to be convenient and they could care less how convenient it is for the person trying to sell to them.

Ning is a shining example that made something easy for the client, but too antiquated and inconvenient for the end consumer. Hence the conversion was essentially nil. Switching to pay-only will see a mass exodus of free loaders and save them costs, but until they change their offering, it will be relegated as a footnote in Internet History.

mark said...

As a Ning creator this has concerned me with one community [www.platform58.com] having over 1000 members and 13,000 pages, another private members network and another just develpoed for a childrens hopsice. I do feel betrayed after only referring another friend to Ning last week due to the excellent service they have given me.

Interesting that Ning say only 25% are not premium users now, the importnace of all ning communities is the positive referrals they get from the 45 million or more members of all communities.

I am looking at migrating to another server, but yet to see one that fills the gap, and may look to fall back to using Facebook pages and groups more in the interim. Posterous ad Grouply are offering migration services.

Not sure if that answers the question it will make more people view current trends and recall the dot com issues ten years ago. Aol's sale of Bebo could be seen as results of facebook being too competive for the market share, we cna only wait and see what grows and be fluid and flexible with the technologies available.

There is an important area of focus now on backing up information stored virtually. Can we trust anyone?