According to an article in econsultancy.com picked up by CMO.com, Ning is eliminating its free model, and laying off 40% of its staff.
So what happened to the up-and-comer? Well, apparently "free" doesn't pay the bills.
Ning has raised $120 million in venture funding since its launch in 2004, but seven years later, it has yet to turn a profit. Interesting that this model was attempted again after the collapse of thousands of dot coms 10 years ago that were long on ideas, but short on revenue streams.
It's great if you can take a strong understanding of code and a good concept to develop a unique digital business model , but companies still have to incorporate the fundamental principles of economics into their business plans. You can't spend money without making money, and you can't spend more than you make. Seems that the golden children at Ning may have forgotten this, not to mention all the big spenders on Wall Street who couldn't wait to invest.
"Free" is a powerful word to be sure. But "profit" is a more powerful word.
