Ning's Phase-Out of Free Services - Smart Business Move? Or Utter Betrayal?

ning.jpgMuch has been made in the social media part of the blogosphere about Ning's recent decision to end their free services. In a post to their Ning Creators Forum titled "NING UPDATE: PHASING OUT FREE SERVICES", the company posted an email from their CEO that said most importantly this:
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.

The post outlined why they need to make the move - and disclosed the fact that they were laying off 69 people.

Some 700 comments later, they closed off comments to the post. The comments seemed to be a great number of very upset users of the free Ning service mixed in with a few folks defending Ning along with Ning employees who seemed to be trying to be genuinely helpful.

The comments across the blogosphere and Twittersphere raged quite strongly. ReadWriteWeb had a post listing alternatives, as did Mashable. TechCrunch reported on sites "welcoming Ning refugees".

While the news sites may have reported it matter-of-factly, many other sites were full of passion. Many nonprofits and educational institutions wrote about how the were going to have to find some other home because they couldn't afford fees. My friend Shel Holtz wrote a blistering post called "Ning reneges on its core promise, shatters customer trust", which included this line:

But the word that keeps repeating in my mind is “betrayal.”

Strong stuff.

Betrayal? Or sound business decision? I understand the arguments on both sides.

IN THE BEGINNING

If you go back in time, Ning was launched with great fanfare in October 2005, a new startup by Marc Andresson of Netscape fame. Per the RWW article I just linked to, Ning's FAQ (now gone) was:

"Our goal with Ning is to see what happens when you open things up and make it easy to create, share, and discover new social apps."

I remember the launch... many of us tried it out. I think I even created a Ning network... although I can't find any email or evidence that I really did. I know I joined a couple. The idea was cool... now anyone can create their own social network!

Over the years Ning raised over $120 million from investors and at one point was valued at over a half billion dollars. Mashable reported one year ago that there were over 1,000,000 networks created on Ning. Ning was one of the early supporters of OpenSocial and rolled out "Ning Apps" to Ning's 1.5 million networks at that time. I know of many folks in the social media/marketing space who recommended Ning as a platform for people to build communities. I did to several groups. I was even considering using Ning as a platform for a community around my upcoming book like Steve Garfield did for his Get Seen book. (I opted for a blog and a Facebook page instead.)

IN THE END

It now seems rather clear that something was broken with the business model. $120 million dollars and 1.5 million networks later... they chopped 40% of the staff and dropped the free service that brought them so much attention and undoubtedly investment.

It sounds like from a company perspective they had little choice. As a recent Mashable post said (my emphasis added):

We’re not sure how pricing will change over the next few weeks, but what we do know is that the dotcom-era free-for-all of apps, services and content for end users is not-so-gradually coming to a halt. In the light of economic reality, nothing is free. Someone — be it an advertiser, an administrator, an investor or an entrepreneur — is footing the bill for every one and zero that’s electronically transmitted across this great Internet of ours. And at some point, most of those folks expect to see a return on their investment.

"And at some point, most of those folks expect to see a return on their investment."... indeed. And $120 million of investment is a lot to seek a return on. I can understand that they didn't have many great choices... and were undoubtedly running out of time.

TRUST AND BETRAYAL

On the other hand, I completely understand the anger, sadness, frustration and passion of all of those who built communities on Ning. Ning offered a great service ... all you had to do was bear with seeing the ads that were displayed. In return you had powerful tools to build your own community.

You put your trust in Ning that they would provide this service for free - and now Ning has betrayed that trust.

I don't envy all the nonprofits, schools, churches and other groups that used Ning as their community and built their communication infrastructure around that site. Sure, there are alternatives, but switching is a pain... you ideally want to move some or all of your content... and you have to bring all your users over with you... It is a lot of work.

It's easy to say, as I've seen many commenters do, that "you get what you pay for"... and to chastise users of Ning's free service to be so naive to think that it would be around for the long term. But why not? That was the promise made by the company. Build your community here and we'll make it easy for you to maintain and grow - and so many networks did prosper there.

SPOFs AND "THE INTERNET WAY"

As Shel wrote in his post, I have this issue with "single points of failure" (SPOFs). I've written at great length about how Twitter and Facebook violate "The Internet Way" of distributed and decentralized services. I would add Ning to that list as well. It is a centralized service under the control of a single company... and a startup company at that.

The problem in relying on a single company/service/platform is that if you are locked in to that company/service/platform, you have a single point-of-failure.

They die... you die.

Compare the Ning situation to, say, garden-variety web hosting providers. You can get web hosting pretty much anywhere for an inexpensive amount of money. Upload your HTML files, point your domain there... ta da... your website is up and running.

Don't like the web hosting provider? Or have too many service problems? Or have the web hosting provider fail as a business? No problem... sign up with another web hosting provider... upload your HTML files (you do have a backup, right?)... point your domain there... and ta da... you're back in action. You have many, many, many choices for web hosting providers... it's all distributed and decentralized.

CONTROL AND PORTABILITY

With a web hosting provider... or even an email provider... there is a fundamental feature:

YOU ARE IN CONTROL!

If you don't like the provider, you can move. You aren't locked in. Sure, it may be a pile of work... and moving your domain may be a hassle if you didn't retain control of it... but it's relatively straightforward to move. Even if you use PHP or other scripting languages, odds are that you can move your web site to another provider, because...

Web sites are portable as they are based on open standards.

Usually... unless, of course, the web hosting provider found some way to make your administration "simpler" and subsequently lock you in to their services.

When using Ning, though, you sacrifice that control and portability in the name of simplicity. It's easy and simple (and free!) to set up a Ning community. It can be a lot harder to set up your own software on your own server - and it will probably cost you something. The same can be said of Facebook and using a Facebook Page or Group... or using any of the many other services out there that let you build communities.

A HARSH LESSON

Sadly, hundreds of thousands of actual users (perhaps millions) are learning about control and portability in a bitter and harsh lesson. They will soon learn about what pricing Ning will be offering... and they will have to make their choices. Pay some fee... move their community... or simply shut it down. I already know that one of the ones I am a member of will be moving. I expect many others will move as well.

I can only hope... and that is what it is - "hope"... that as Ning community administrators look at alternatives, they will ask those providers the tough questions, like:

  • How do I know you will be around in a while?
  • How can I trust you not to screw me like Ning just did?
  • What is your business model?
  • How easy is it for me to move my community OFF of your platform if I choose to do so?

And so on...

As for Ning, I wish them luck... I somehow think they're going to need it.


UPDATE: John Cass has an excellent post tracking many good posts involved in the conversation about Ning's changes.


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Google's orkut to launch application platform based on OpenSocial

orkut - login.jpgDoes anyone still use Orkut?

Obviously some people do and the first visit to my page in eons showed me that a couple of people I know had actually been by there recently. But in the grand "battle" between Facebook, MySpace, Bebo, etc., orkut doesn't seem to get much mention these days. I know that I joined orkut back in 2004 when it launched and you had to have an invite to get in. But a year or so later I had basically left it behind (except that my account is still there and now and then does get friend requests).

So I was a bit surprised to encounter over on Official Google Blog the post "orkut going more social" that contains this text:

"Starting this month, we're enabling developers to make their social applications available to orkut users. We'll start ramping up to more than 50 million people over the next few weeks.

To prepare for this growth, we're now accepting social applications. For a while now, developers have been able to write, test, and play with applications on orkut. Later this month, however, we're going to start rolling them out to orkut users. OpenSocial developers can submit their completed applications (deadline: Feb. 15).

To help developers ready their applications, we're offering engineering support and training. We've scheduled orkut hackathons on Feb. 14-15 from 10 am-6 pm at the Googleplex in Mountain View and via videoconference in New York. For more information or to RSVP, please email [email protected] If you can't attend, we hope to see you in the OpenSocial forums or on chat (irc://irc.freenode.net/opensocial)."

The post obviously has more information and the relevant links.

That Google is doing this is no surprise given their backing of the OpenSocial initiative. It is interesting to see the note about "ramping up to more than 50 million people". Is that the current number of active orkut users? If the Wikipedia entry is accurate (that states 67 million users in August 2007) that would certainly be plausible.

Regardless, it is great to see another social network indicating that they will have working support of OpenSocial apps soon. The more there are, the more incentive it is for app developers to develop for OpenSocial.

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MySpace enters the "application platform wars" against Facebook

MySpace Developer Platform.jpgSo today MySpace squares off against Facebook with the release of the MySpace Developer Platform. One of the key features of the "MDP" is that it is supporting the OpenSocial initiative and has a lengthy page explaining the interaction between MySpace an OpenSocial. They also provide some nice tutorials starting with (of course!) a "Hello World" and then getting right into creating an OpenSocial application.

It's intriguing to me that MySpace is not launching this with any existing high profile apps. It's really just providing a box of parts and saying... "here, have fun, go nuts!"

In fact, serious application deployment is being put on hold for a one-month period while developers try out the platform. Apps are limited to being installed by 10 users during this one-month development period, which, as other sites are mentioning, has the effect of "leveling the playing field" and giving all developers, large and small, a chance to work with the platform before it goes "live" and mass deployment of applications to MySpace's hundreds of millions of users can begin.

It will indeed be very interesting to see what developers actually do with all of those parts and what applications emerge. We'll have a clearer picture in a month, eh?

More coverage on the announcement that I found useful:

(Now, the question for me personally is this... will this be enough incentive for me to actually pay attention to my long-neglected MySpace profile? Hmmmm.... )

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May the walls start to come down... Facebook joins with Google and Plaxo in joining Dataportability.org

dataportabilitylogo.pngAs I've written about in the past, I continue to remain concerned that social networks are really just "walled gardens" that are isolated from each other. Late last week, Robert Scoble getting temporarily kicked out of Facebook brought the attention of many of us to "DataPortability.org" and its "dataportability-public" Google Group. Now, today brings word that Facebook, who has usually been a holdout in "open" announcements to date (like OpenSocial) will be joining in to the Dataportability.org project. The news can be found here:

The news is outstanding, really, for those of us who want this kind of data portability. To have basically all the major players working together will be excellent. It would, indeed, be great to have the walls start coming down...

The devil, of course, lies in the details... time will tell whether true actions will emerge out of the DataPortability.org initiative.

Still, it's a great way to start - and I've definitely joined the GoogleGroup mailing list to join in the evolution. Let's see if the walls can shake a bit, eh?

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New "Shindig" project will be open source OpenSocial implementation

3A99D7EC-F80D-4655-88EA-84A78313CC00.jpgGoogle's OpenSocial effort passed a milestone yesterday when the first pieces of code were uploaded for Shindig (tip of the hat to Mr. Topf for pointing this out), an open source implementation of the OpenSocial API. Why is this important? Quite simply, I see an open source implementation as critical for the success of any API. As noted in the Shindig Proposal on the Apache Software Foundation's web site:
Shindig will provide implementations of an emerging set of APIs for client-side composited web applications. The Apache Software Foundation has proven to have developed a strong system and set of mores for building community-centric, open standards based systems with a wide variety of participants. A robust, community-developed implementation of these APIs will encourage compatibility between service providers, ensure an excellent implementation is available to everyone, and enable faster and easier application development for users. The Apache Software Foundation has proven it is the best place for this type of open development. The Shindig OpenSocial implementation will be able to serve as a reference implementation of the standard.
The key part is that last sentence. A "reference implementation" does a couple of things. First, for developers for whom the license terms are appropriate, they can simply incorporate the code directly into their products and... ta da... they are writing OpenSocial applications. Second, for developers who can't directly use the code verbatim due to licensing, they can at least study the code and understand how it works. They can see how the OpenSocial interaction occurs in a working example. Getting an open source reference implementation out there enables developers all over to rapidly use and learn about the API. While this news yesterday represents only the very first step in the development of the project, it's a good start down the path. Now, developers can download the existing code, try it out, and, hopefully, contribute patches/fixes/etc. back into the code base. Shindig will be a good project to watch. There does not yet seem to be an official project web page, but there is a "project status page" on the Apache Incubator site. P.S. And for those wondering, "shindig" is an English word for "a social gathering" which makes it rather appropriate.