Ning’s bubble bursts? Are you kidding me?

by Stii

Ning has a new CEO that decided it makes perfect business sense to cut their free social networks and only have paid for social networks in the future and the Internet goes “Bye-bye Ning!“. The free networks cost them money in resources and support. By cutting their free offering, they can effectively cut their staff compliment by a whopping 40%. Not only will they save money, but they have an opportunity to make more money too. Yet, for the bulk of people online, this makes no business sense.

I’m not saying that freemium with a paid for value add is not a viable business model. It could be that Ning simply did it wrong by offering too much for free. What I am saying is that from a normal business perspective, this is probably the right move for Ning. Yes, they’ll make a lot of cheapskates very angry, but having used the occasional Ning network (The Silicon Cape initiative is using Ning) I can say that their product is rock solid and feature rich. They don’t have to worry too much. It would still be cheaper to create a Ning network than it would be to develop your own app.

Unless I’m simply short sighted and missing the point. In that case, enlighten me so I can learn something new, please!