Will focus on premium offering

Apr 16, 2010 15:21 GMT  ·  By

Ning, the social network platform which enables anyone to create their own interest-based networks, has hit some rough times, or at least, that’s what the latest moves at the company would indicate. In one fell swoop, the company’s newly appointed CEO is shutting down the site’s free offering and is laying off 40 percent of its staff. The moves come after former COO, now CEO Jason Rosenthal took a “hard look” at the business.

“My main conclusion is that we need to double down on our premium services business,” he said in an email sent to Ning employees. “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... 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.”

That may not be as drastic as it seems, Ning offers a variety of premium options starting at very, very reasonable pricing. It’s to be expected that many operating a free network would opt for one of the cheap premium options and that will be that. Still, there will probably plenty of networks that either shut down completely or move to another platform.

Ning employees though, don’t get off that easily. The company says it will lay off 69 people out of its 167-strong team, a 40 percent cut. It’s clear that Ning isn’t where it would want to be financially, and the advertising revenue on which it relies doesn’t pay the bills. Still, the site seems to be doing pretty well in terms of traffic, not that it helped it so far. But for a company valued at $750 million less than a year ago, some changes are probably needed.