I really need to have a good reason to talk about events not directly related to Wikidot, but the news from Ning I have just read stunned me. Ning is an increasingly popular "social network builder" — you can create a site, invite friends, upload photos, set up a forum, discuss, share etc. Much like on Wikidot.
Yesterday, one month after Jason Rosenthal replaced Gina Bianchini as a new CEO, Ning announced that they will cut 69 jobs and completely shut down their free service. Ning will remain as a paid-only service. Needless to say, this really upset a lot of its users. Although Jason claims that 75% of their traffic comes from premium sites, vast majority of sites and users are still free.
It might seem that Ning is sending a clear message: "free does not work". It might sound scary, taking into account many similarities to Wikidot. Actually, I do not think this is true at all. Providing free services is very difficult and we know it from our own experience. But Wikidot has been offering free wikis for more than 3 years with large success.
The big difference between Wikidot and Ning is that Ning's growth is much like a bubble. Taking $119m investment (as opposed to little money we had just to get started), growing to 167 employers and burning the money just to grow the service without a reasonable revenue stream is like riding a roller coaster without seatbelts. Grow quickly, fall spectacularly. What I am guessing is that Ning has to prove its (estimated) value. And become profitable at any cost, even if this would mean making such dramatic actions.
At Wikidot, we treat "free" as an integral part of our service. We rather spend money on supporting free sites than on marketing and advertising — in the end free sites are our marketing strategy. We have a small, but dedicated team, work efficiently, keep costs low and care primarily about building a stable product, community and business.
Unlike Ning, we are not planing to close our free sites. There was not a single moment this could come to our minds. Sure, we do encourage our free users to upgrade to paid plans and we do put advertising on free sites from time to time. This helps us maintain the free version and provide a similar quality of service as to premium sites.
Now, if you come from Ning and are looking for an alternative — give Wikidot a try!
UPDATE: There is a great post and discussion at Signal vs. Noise, a weblog by 37signals: Eyeballs still don't pay the bills.