Are We Seeing the Death of Freemium Model?

June 7, 2010

This past April, popular social networking site Ning announced that it would no longer be able to offer its services for free. In an e-mail to his 40-percent-reduced employees this week, Ning CEO Jason Rosenthal wrote:

Our premium Ning networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others … drive 75 percent of our monthly U.S. traffic, and those network creators need and will pay for many more services and features from us.”

It shouldn’t be surprising that Rosenthal’s tone was rife with hope. But what if some or even most of Ning’s networks do not opt to pay for previously free services? I personally have been sent emails from soon-to-be-former Ning networks about their plans to move to a different platform rather than pony up.

Dissecting the Ning Decision

Those unfamiliar with Ning might think that the company is the brainchild of a few crazy kids without a great deal of business acumen. Think Chat Roulette. That’s hardly the case. One of the company’s primary visionaries and investors is Marc Andreessen, a man who has made billions from successful technology-based ventures.

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