Ning Exposed - Tech Company Scams its Clients

[XXPANTHAXX]

Sunday, March 22, 2009 11:23
Posted in category Ning, Special Reports

ning-logoClients of Ning are outraged over a decision that Ning made public last week. The software maker sent out an email to all of its clients, those who have created a social network on Ning, stating that they would email all members of all websites who use the Ning software to promote the newly designed Ning.com.

“Please do not send the email to my members. I pay you not to advertise on my site and I don’t think you should target my members directly,” says one Ning network creator and paying customer. Ning charges network creators to keep all Ning promotional links off their site. Some members have been paying this fee for years and so are even more upset at the direct email marketing campaign. Why pay the fee?

To make matter worse, the new Ning.com combines all member data from all websites created using the Ning system. The owners of the websites have no option to opt out or remove their members. There’s going to be a lot of explaining to do when members see their own picture, profile, and information on Ning.com, a website that most members have never even heard of.

Is Ning a scam?
There’s a theory that Ning’s actions are part of a carefully planned scam to make the company the next MySpace or Facebook. Instead of spending millions of dollars advertising and gathering enough members to compete with MySpace or Facebook, why not create a social network platform and rely on the ambition of thousands of other network creators to up build membership. When the time is right, simply take all of those members and combine them into one super-site, Ning.com.

The structure that Ning has set up is somewhat like a pyramid scam. The thousands of network creators do all of the work, spend all of the money to benefit those at the very top.

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If they are going to use members which were gathered by the hard work and money of the Network Creator’s, shouldn’t Ning be paying the network creators? Why do the network creators pay Ning?
The unraveling of Ning

April 2008: Ning raises $60 million in funding. The fat and lazy syndrome kicks in.

August 2008: Ning shuts down app maker “Widget Laboratory.” Ning had some kind of dispute with WidgetLaboratory, who designed applications for the Ning platform. Ning decided to ban WL and so all of the applications were removed. This caused havoc on hundreds, if not thousands, of websites who used addons by WL. Ning would not allow WL back nor would it consider allowing the apps back. They received hundreds of complaints.

WL wrote in a press release:

“We have achieved a level of market penetration into the Ning community that has made WidgetLaboratory a somewhat “essential” resource for add-ons and widgets. Based upon the personal phone calls and correspondence from the entire Ning team, including their entire Executive staff, it would appear that they decided to eliminate WidgetLaboratory for anti-competitive purposes alone. This is truly ironic to us, given the fact that our products have demonstrably INCREASED the popularity of Ning and caused more customers of Ning to purchase their Premium Services.”

Strengthening the claims made by WL, Ning announced a partnership agreement which it entered into with WL’s biggest competitor, Scripts4Ning. News of the joint venture was announced within weeks of banning WidgetLaboratory.

August 2008: Ning bans access to all PHP files. If you own a website which uses the Ning platform, you can no longer access your own website files! This policy is still in place. You aren’t allowed to see your own files.

November-December 2008: Ning shuts down the Network Creator forum making it impossible to voice opposition in a meaningful way. The creator forum was the single most visited site for network creators. They would meet to discuss ideas, talk about new updates, get help, and voice criticism.

Ning has been known to remove entire posts which are critical of the company, as well as ban members who post them. This recent note on a Ning group complains that Ning is deleting comments “As fast as we post them.” The member is referring to the 200 comment post complaining about the direct email campaign. Members complained that as many as 17 replies were deleted by Ning last night alone!

December 2008: Ning reverses its policy against meddling in the content of individual networks. The change is a complete about-face. Ning announced that it will no longer allow websites which are “Adult” in nature. Thousands of websites, who believed that their content was fully compliant and secure received notices from Ning. They were given a few weeks to transfer their sites out of the Ning platform. Small problem- They didn’t have access to any of their files and couldn’t move. Ning, realizing the dilemma they created, made an exception and allowed those network creators access to their websites files.

This is quite a change from a company who’s co-founder Marc Andreessen was quoted only a few months earlier saying:

“To prevent porn, you have to take an activist stand against freedom of expression — you have to get in there and judge content, judge people, judge intent, and take action based on your judgments. I would never criticize a company for doing so, but I don’t want to do that, and we as a company don’t want to do that.”

Oh, by the way, they didn’t remove ALL adult content from Ning, only the content they didn’t like. If your name is 50 Cent and you own the largest social network on Ning, you can have all the porn you want (BEWARE: Link is NSFW). I guess you can’t really blame them. How do you argue with 50 cent?

[Update]February 2009: Ning Changes its Slogan (Axes Social Network Platform Motto)
“Create Your Own Social Network for Anything” was the long time slogan of the software company. If you visit the new Ning.com, however, you’ll notice that they’ve removed their slogan and now make no mention of the fact that they are a social network platform. NONE AT ALL. The new slogan reads “Ning lets you create new social experiences for the most important people and interests in your life.”

For those who thought that Ning’s recent policy decisions were just a fluke, THINK AGAIN. They are taking steps to recreate their entire image as an independent social network (In direct competition with the very clients they are charging).

Spam-Spam-Spam: If you are a member of a Ning site, you will know about it quickly. Ning networks are bombarded by spam invites to join other networks on Ning. Your inbox will be flooded by emails that say “Come Join Me on XYZ Network.”

There is a hole in the system, which is convenient for Ning, which allows people to gather friends across any website using Ning’s technology and then invite them all to join their website. The invites are sent directly to email address, even though you never gave out your email address.

Imagine if all of your friends on MySpace have their own MySpace sites and each constantly invite you to join them? The invites are sent to your email inbox, and because of the way Ning is set up, its hard to tell which friend on which site actually sent it to you!

Ning has refused to deal with this problem. Its actually a convenient problem for Ning. The more social networks that people join which are run by Ning, the better the chances are that these members will know who Ning is and ultimately use the new Ning.com.

The Business Plan Will Fail
Ning should stick to what it does best. They have an excellent and unmatched platform to create a social network. People are very willing to pay Ning for the software and their market will continue to grow as they become the dominant player.

As the company shifts direction, they will anger their existing clients, and diminish their brand in an attempt to achieve something which is unachievable for Ning. It will never be a MySpace or Facebook. Most of the social networks on Ning are comprised of a few hundred people (Maybe less). These small networks tend to be niche areas which are made up of communities of people with specific common interests. If they wanted to be on MySpace, or Facebook, then they’d be there. The appeal of the small Ning network is the community of like minded people.
Ning Must Act

If I were the VC firm who pumped $60 million into Ning, I’d have serious concerns. Ning is clearly not the same company they were when the funding began. They have since proved to be erratic and unpredictable in policy, willing to damage their client base and brand to pursue a non-core agenda, and they’ve compromised the trust and data provided to them by the network creators. This company needs to change course - and fast. I wouldn’t be surprised if we heard about a flood of lawsuits filed against Ning in the coming weeks.

PS- If you’re wondering why we’re writing about a private company, it’s because no one else will. We received comments and notes about this subject. One person mentioned that they tried repeatedly to submit this story to the major tech blogs, but they wouldn’t respond or write about it, so we did.

Update 1 : Inflating Their Numbers?
It’s been brought to my attention that Ning claims to have nearly 1 million social networks yet the website dedicated for network owners has a total membership of 24,000. The large difference in numbers suggests 3 possibilities:

1. Each network creator has an average of 47 or so social network sites on Ning (Not likely)
2. 98% of social network creators never sign up to use the website dedicated for them? (Also not likely)
3. Ning is inflating the numbers (Most Likely).

Remember when Ning got rid of all of the adult networks? Those networks were a large portion of Ning’s overall traffic. Did Ning begin to drop the number of total social networks? NO. The number, according to ning, has been skyrocketing without any declines. That’s impossible if they got rid of such a large amount of networks.

[Update 2] Are you a Network Creator on Ning??
If so, let your voice be heard. We are hosting a discussion to propose a “Network Creator Bill of Rights” We need your input!

[Godssoulja]

Explains alot of the questions I had about Ning and its polices. We closed our Ning site Sept 1, 2008.

[Langalibalele]

Sho nuff. I have been warning folks for months, and deleted all my Ning memberships. I hate Ning. How is it that my membership on a single Ning site led to me being solicited by tens of others? I found that offensive, an invasion of privacy, and did not feel secure at all.

The article calls this the "fat and lazy syndrome", I think it's the typical bloodsucking, capitalist syndrome.

[Jalili]

I'll say one good thing about Ning.....it's free and easy to get the feel of running your own site BUT the problem with that is the fact that you don't own it.

When I get more knowledge on how to build a site to the strength of something like a ning site I will pull down The Mind Kitchen and rebuild it on a PRIVATE SERVER.