Ning is likely the biggest social network you may never have heard of. Ning has seen explosive growth in unique visitors, offering the ability to create free public or private social networks. Rather than just creating a Facebook page, for example, users could create entire social networks – customizable at a small incremental price – for their cause, organization or family and friends. Unfortunately, it seems the business model just wasn’t there. Unique visitors (eye balls, as they say), don’t necessarily translate into revenue. As a result, long time CEO and web maven Gina Bianchi was replaced by Chief Operating Officer Jason Rosenthal and the network has been forced to lay off over 40% of its stay and put a strong push behind its premium (read: paid) service. It is unfortunate when business circumstances trigger the need for immediate and transparent communications, but it happens and we’ve seen a lot of that over the past two years. In this case it seems as though Ning had blinders on, ignoring a low conversation rate of eye balls to dollars and has been forced to really change its role in the lives of its users. Moving to a premium model with unfortunately cut out a lot of the grassroots users that exist now and force Ning to justify its costs. I suspect that such drastic changes may spell more harm to the business model. Transparency and engagement with the user and developer community might help Ning get back into shape.
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