Ning, money and the writable web


John Montgomery asked earlier this week about Ning:

"Not to complain or anything, but I don't get Ning.
For the past fifteen minutes, I've been clickning through hotornot-like
scenarios. Some of them are hysterical (try "Which driver has the
smaller penis?") and some are mundane (Which is the better beer?). But
I'm looking for why this is the next bit thning and can't figure it
out."

(...I almost corrected his 'typos'...;-)

I replied in his comments:

Hi John,

Let me try:

1.
As I'm sure you know, the 'writeable web' is the second half
Berners-Lee's vision for the web. We've made great progress on the 1st
half: the 'readable web' but have a long way to make the web really
truly writeable.

2. The writeable web isn't just about
publishing text. Simple website creation for home users was/is still
too hard for most. Blogging has made this easier, but is mainly
text-based. People want to write more to the web than just text, that's
why services like Flickr are doing so well (and why MSN Spaces provided
photo publishing as a first-run feature) - there is a huge pent-up
demand for this.

3. The writeable web isn't just about
publishing the stuff you create. It really comes to life once you are

able to mix/remix your content with others, even dynamically. Doing
this kind of content integration still requires web dev / technical
skills.

Btw, content in this context really also means
services, structured data, text, music, video, pictures. The demand is
there for people to remix all this rich content really easy so people
can create new content.

4. In the same way blogging made it
easy for non-technical users to publish text to the web, services like
Ning go the next step. They allow non technical users to recombine and
augment content, to create their own new content (as per definition of
content above). This means a mum at home can potentially become a web
services integrator (I use the web services loosely here, but you get
the point). This is what the excitement is about - it opens new doors
and opportunities for non-technical folks to create brand new stuff
(most of completely for non-commercial reasons). Anything that brings
us closer to TBL's vision will always get attention.

Still, John is unconvinced, and then asks slightly different question (again in the comments) - where's the money?

"I
guess, if that's it, I don't get what the fuss is all about. Of course,
I didn't get what the fuss was about RSS, either -- it seemed like one
of those natural evolutions of the Web.

I also have no idea how ning will make money versus, say, Google, MSN, or Yahoo."

Good question John, I don't know either.
Marc Andreessen might but hasn't share the biz-plan me yet. 
Are you there Marc?
At this
stage it is worth pointing out that Google's business model was pretty
much undefined for quite a while before they made their first dollar in
black.  I believe MSN lost money in its first few
years, but now in profit...not sure about Yahoo.  Public APIs were
twinkles in their VCs/backers eyes back then. Now look...
So
back to the right question: how will Ning make money
(assuming that is a goal, not just a bit of
crazy-millionaire-dotcom2-philanthropy).
Giving it some thought, I can only think of 2 biz models (or combo of both) right now:

  • Advertising
    • Each customer-created service parsing
      through its servers could render out third party ads to the consuming
      service, a kind of affiliate program distributed via customers' sites
      and services. A standard ad model would be applied on
      top of this, they take a cut of each transaction - high volume, small
      margin biz
  • Tools and services
    • Two target customers: consumers & hobby / pro developers). Ning could be a service that provides added value through some sort of Ning web developer offering
      (tools, integration, APIs?) for the more tech savvy customers. For
      non-tech-but-sophisticated customers are offered higher
      value features through subscription model - similar to
      blogging biz models, e.g.: basic (free), standard ($35 per annum), pro
      ($65 per annum).

Any others?

So, everyone's wised up this time around.  As Bubble 2.0 makes its merry way down the isle: you've just got to ask the pregnant bride: Where's the money?

Going back to my original response,
what Ning is doing here is moving the game on in an interesting
way. In fact there are two games: 'web as a platform' and the
'writable web' (writeable?). Kevin Briody writes:

"It
empowers the end-user – who doesn’t have to be a developer – to create
software that works for them. I fervently believe this is the trend of
the future. Creating Web frameworks like Ning that remove much of the
complexity of creating complex applications, and put control in the
hands of the end-user. The develooper’s job becomes creation and
maintenance of that framework, not building the end app anymore."

This concept is a big
deal (not original idea but I've not seen it executed) and therein lies
the opportunity. Nobody is saying that Ning will pning or kning the
whole wide world  (well, maybe some might be). NiNg might IPO and
become a very big fkning deal. nING might die in a week...either way, I
don't care. Not my money.  But I do think we are witnessing a
brand new model at work here, and if they die, the idea won't die with
them - this is the writeable web idea taken to another level. It is
where we are going.

But here's the thning: how literally
should one take the 'web as a platform' to be?  Ning appears to
interpreting it quite literally.  The question is, who else is
going to take it literally? How far can it go before it stops making
sense? It can it only really make sense if you go all the way? We'll
have to see.

I'm not privy to discussions taking place at higher echelons of Microsoft but the trend is clear. Microsoft has been banging on about web as a platform for a while now. Microsoft is running with it, indeed driving much of it, and plenty more to come...we're not the only ones though.



Update:
Marc Andreessen (!) posts a comment on this post: confirms a couple of things:

"Alex -- your description of what we are trying to do is very well said. It's an experiment, but those are the goals.




We are going to see if we can generate enough revenue through a
blend of advertising (like Google, Yahoo, etc.) and premium services to
be able to support what we are doing, including the free developer
accounts.




Thanks for the thoughts and comments..."



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Comments (12)

  1. Marc Andreessen says:

    Alex — your description of what we are trying to do is very well said. It’s an experiment, but those are the goals.

    We are going to see if we can generate enough revenue through a blend of advertising (like Google, Yahoo, etc.) and premium services to be able to support what we are doing, including the free developer accounts.

    Thanks for the thoughts and comments…

  2. MSDNArchive says:

    Thanks for visiting Marc. Nice to know I’m not entirely off the mark 🙂

    Alex.

  3. johnmont says:

    It would have removed about 100% of the charm of my posts. 😉

  4. Cashmore says:

    Alex,

    Great points. You’re absolutely right – blogging was about the democratization of content creation, and Ning is doing the same for web development and web services (putting this stuff within everybody’s reach). This is what you might call a Very Good Thing.

    As for a business model? Come on, guys – this is potentially *massively* profitable. The users are creating a massive network of sites (for free) which grows everyday – Ning can place ads on all those sites and reap the benefits. And if any of users create sites with premium subscriptions, they’ll take a cut of that too. So as long as they scale ok (and this is mainly a bandwidth/server issue), then the business model is fairly solid. Nonetheless, they do run the risk of growing too fast right now. As someone else pointed out, they could have 5 Friendster sites running on there by next week – if Friendster had problems scaling, how will these guys cope?

    There’s also a touch of irony in this – web 2.0 is about removing walled gardens, but we might now see a system whereby most of the web 2.0 social services are hosted on Ning, with Ning as the sole authority.

  5. Stewart says:

    Hey Alex, I was thinking that i’ve seen this loads of times, isn’t it’s just an SDK with an appropriate level of abstraction for the user?

  6. Haven’t we been down this "advertising will pay for all this…" path before? Anyone remember all the froth last time? Didn’t we learn anything from the last advertising circle-jerk cycle? Which of these new-fangled Web 2.0 sites is going to start using the pets.com puppet for their new mascot? Which of these Web 2.0 sites is going to say, "Hey – let’s do grocery delivery via web services!" this time around?

    If this latest attempt to slap a new name on classic client-server architected applications is going to succeed, some user somewhere is going to have to BUY something, and give one of these new sites some real cash. If I were a VC, and someone presented me a business model based purely on "generating ad revenue", I’d laugh, slap them stoopid, and tell them to go take an economics class.

    What exactly did blogging add to the "democratization of content creation" that didn’t exist before? If I *really* wanted to keep up with someone’s lunch list, or read 1000 reviews of "Serentiy", couldn’t I just subscribe to someone’s email distribution list?

    Why do we continue to rename the same technology and call it a brave new world at the first sign of the hard problems – like sustainable business models, or scalable architectures? Let’s just admit this stuff gets really hard eventually, and get back to work.

  7. linux cds says:

    SDK abstraction is a half baked concept for this scenario.

  8. ntltrmllgnc says:

    It’s really simple. Web Technology has gone through two stages:

    1. What’s possible? The answer came from HTML and Javascript.

    2. How quickly can we do it or manage it? Wikis took away the development tasks. No uploading of pages to a server, no hardcoding of links. It really shifted the weight from development to publishing.

    Email distribution lists are like assembly code in comparison. Open, read, reply, send. They are not fluid at all. Compare yahoo chess to chess by message in a bottle.

    We are at steps 3 and 4:

    3. Can I give you something you can understand and modify? Ning and for the life of me I can’t remember what it was called (starts with p, ends in faces, similar to firefoxit) allow people to integrate information and pass it to others as a package others can modify. Imagine you have data and you want your partner to see the data, demonstrate to him/her the ideas related to the data, and then have them change the demo directly instead of just making suggestions.

    Web 2.0, at least for me, is about making all the steps of the document/software/product development cycle feel less like running errands and more like a conversation that isn’t interrupted.

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