It appears Ning, the community platform, will now discontinue its free service, and only offer a Premium version.

I think that’s sad for two reasons:

• The first is that I’ve been a member of a number of interesting Ning groups, and I continue to be a member of a couple which are on the free platform and of real value.
• The second is that I’m disapointed that they’ve failed to monetise the free platform successfully enough for a business they feel they can continue.

If you haven’t used Ning, it basically allows you to create a fully-functioning community website in seconds, allowing you to have memberships, forums, profiles, blogs, documents etc around your area of interest, and the base level was a free option, with payments for support (e.g. getting support in 24 hours), custom urls,storage, going ad-free, or hiding the ‘create a network’ links.

But with a new CEO, they’ve announced that will end, and free users will either have to pay or be transitioned from the service. Ning is also laying off 40% of the workforce.

Besides the fact that Ning has proved to be an incredibly useful community platform, I’m disapointed and a little surprised that the model which they’ve picked is a purely paid one.

For one thing, it moves Ning from pure community platform to potentially see competition from other areas, including project management etc – e.g. Basecamp, Zoho, or Glasscubes, for example. Or even Google Docs.

For the other, it seems bizarre that there weren’t ways to effectively monetise users passionate enough around a subject to form a specific social group outside of Facebook, Twitter etc. I understand that it may have been incredibly complicated, but I’m sure most groups would have one or two key products which would have been incredibly popular, for example, and I’m alos sure that there must be enough duplication across groups for this to have potential. After all, Techcrunch listed it as having 40 million registered users, and 1.9 million groups.

In the short term, a small percentage of 1.9 million groups which remain as paying customers is a decent enough income, but you have to wonder how many will stick with the service. It averages at 21 members per group, but obviously there’s a Long Tail in effect. Why not just shut out dormant/less than 5 member groups, for example?

And in the meantime, the incredibly responsive Posterous team have jumped onto something yet again and will build a Ning importer. Yes, they’ve jumped on the Ning announcement to get publicity, but they’ve still got to commit at least some resource to following it up!

There’s lots of anger at the way the news has been delivered to users (Many seemed to find it on other places before seeing the Ning blog posting). David at 37Signals writes that ‘Eyeballs still don’t pay the bills‘, but I suspect that’s particularly true when those eyeballs are mainly monetised by Adsense.

It’ll be interesting to see what proportion of Ning users are premium users, and what proportion remain with the company. My personal suspicion is that the platfrom they had will be the peak of the company in terms of interest, that they should have been able to effectively monestive it (Especially with $120m VC funding on board), and that their chosen route is unlikely to succeed due to a relatively weak USP , but good luck to them..