Big, Big Round of Funding For Ning

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1. Otis Gospodnetic
   

   July 9th, 2007 at 4:59 pm

   Nice dilution. But http://www.quantcast.com/ning.com does look nice.

2. Rishi
   

   July 9th, 2007 at 5:07 pm

   Aren’t there a number of companies that provide user created social network free that kinda flopped?

   Out of memory, I remember onesite which has networks completely empty or unused for more than a year : http://www.onesite.com/ .

   How is Ning any different?

3. Mick Liubinskas
   

   July 9th, 2007 at 5:09 pm

   Wow, 221m? Ning is doing some good stuff but that’s big. And what are they going to do with 44m? Acquisition time?

   I think Facebook as a billion dollar company is fair, but this smells a lot like an ‘associated bubble’ much like we saw for Skype and YouTube.

   Again, wow.

4. Tim
   

   July 9th, 2007 at 5:13 pm

   Bloated valuations,
   Merger madness,
   Surging stock market,
   Companies with no business model
   + Impending interest rate hikes,
   High personal debt levels
   =
   Bubble 2.0

5. Alaska Miller
   

   July 9th, 2007 at 5:21 pm

   @3

   LOL, you think Facebook at 1 billion is alright but skype and youtube being 1 billion is ludicrous? Wow. Just plain wow.

6. Quiltie
   

   July 9th, 2007 at 5:25 pm

   The money is certainly flowing, hopefully this is real and not another bubble

7. Andrew
   

   July 9th, 2007 at 5:29 pm

   WOW. VC’s invest in people not ideas, but this seems like too much money even for Netscape founder.

8. Saeed
   

   July 9th, 2007 at 5:32 pm

   Revenues…?

   Do they plan to make money solely based on serving up ads? Is this sustainable? I’ll plead ignorance, so can someone fill me in on how their model works…

9. Sean
   

   July 9th, 2007 at 5:34 pm

   Ning is really cool but 221 mil, jeez, that seems crazy.

10. Sean
    

    July 9th, 2007 at 5:34 pm

    er…. 211…

11. Chris
    

    July 9th, 2007 at 5:44 pm

    #8.

    I am not sure how their model works..but one thing I know, companies that rely solely on advertising may not last very long. This is because more and more people are becoming immune to online advertising. When is the last time you clicked on an ad online? In less than a year or two, you will see companies solely relying on advertising to start folding. Some of the new method are yearly subscription like Flickr althrough it may not necessarily sustain the site as you are not able to charge a high amount for yearly subs. These are just my thoughts.

12. RBA
    

    July 9th, 2007 at 5:45 pm

    #8 No, they also offer premium services:
    http://www.ning.com/about/businesses.html

13. matthew
    

    July 9th, 2007 at 5:53 pm

    that is totally crazy. booble.

14. Tim
    

    July 9th, 2007 at 5:59 pm

    Chris:

    “Some of the new methods are yearly subscription…” I wouldn’t really consider this a new method. =^)

    Personally I don’t like the advertising model much, unless you are truly providing what your customers are looking for in an unobtrusive and convenient manner, something only Google does well in my opinion.

    I don’t know that this means ad model sites will start dropping like flies. As has most always been the case, the best internet revenue models are based on multiple streams of income. If you are online only making money through only one revenue stream you are leaving a lot of money on the table.

15. Observer
    

    July 9th, 2007 at 6:45 pm

    The traffic today doesn’t seem to warrant the valuation, but I am guessing it has nothing to do with the traffic, and everything to do with the person. If MarcA were to start something brand new, it would instantly get a $100 million value, I would think, so in that sense, Ning is only 2x a “MarcA new start-up value”.

16. Anthony
    

    July 9th, 2007 at 6:51 pm

    We run our social network on the Ning platform and love these guys. Great admin UI and front end flexibility. We’ve scaled to 560 members and 120,000 page views in a few months with pretty minimal downtime. These guys get it.

17. Mick Liubinskas
    

    July 9th, 2007 at 6:58 pm

    @5 No, I think Skype and Facebook were pretty fair (except getting Skype without the p2p tech is just dumb). It was the post acquisition surge of “me too”’s thinking - well if they did it, it must be easy.

18. Len
    

    July 9th, 2007 at 7:02 pm

    Hey folks,

    First congrats to Marc and Gina over at ning! They deserve a great deal of credit for the effort they are putting in to help their network creators in building and populating their sites.

    As for revenue, these folks have huge potential that people who don’t use the site don’t easily see. First there is the premium services they currently offer, but those honestly are not the holy grail.

    As someone who has a couple of unfinished ning networks, and a few more that will be created as they expand their offerings, I’m excited about the possibilities. For example with 10’s of thousands of small networks, the potential exists for an in-network store function, that contains a shopping cart and a paypal type of ecommerce solution. This alone will be worth it’s weight in gold.

    As a ning network builder with limited php skills (like the majority of the general population), I’d happily pay them some premium dues to use these features, rather than trying to install them myself. Also my network of peeps will be encouraged to use the payment features to buy goods in my store and from my network.

    That’s just one, and a pretty good one at that. I have more but will leave it at that for now. I know some of you will still say the 211 wasn’t worth it, that isn’t my point though.

    More potential exists than what people who don’t use the site, will see.

19. David Mackey
    

    July 9th, 2007 at 7:18 pm

    Wow. Thats quite the bit of cash infusion - but Ning deserves it. They are really innovating and I am looking forward to see what they will be releasing over the upcoming months.

20. ChandraB
    

    July 9th, 2007 at 7:21 pm

    Ning must have some serious amount of traction to close a funding round this big. But I don’t know anyone who is using it…but I do know MySpace/FB/LinkedIn users. I wonder what Legg Mason thinks the exit amount will be? has to be over $1B.

    High valuation are a double edged sword…if Ning ever needs to raise another round, getting someone to top this will be difficult. Not a spot I’d want to be in if that happens, but how quickly can you run through $44M?

    I’m changing my name to Marc…maybe I’ll have as good luck with fund raising then, but for now I’ll settle for a nice table at Morton’s.

21. Jon
    

    July 9th, 2007 at 7:22 pm

    I don’t see the basis for such a lofty valuation.

    Has Ning been approached by a major publisher with a high acquisition offer? If not, then the traffic doesn’t seem to warrant the price tag. Ning might be doing a good job, but it’s taken a lot of stumbling to get it right. It’s not a startup that came screaming out of the gates or has generated that much buzz from early adaptors.

    This feels like a bubble event.

    Michael usually has more to say about this type of valuation and I’m surprised by his lack of commentary. Perhaps too many VCs have too much at play for him to make a derogatory remark.

22. Service Untitled
    

    July 9th, 2007 at 7:31 pm

    As Mike noted, Mark confirmed the $44 million on his blog:

    http://blog.pmarca.com/2007/07.....new-i.html

    That is a lot of money for any company. I hope the company is successful, but I also hope this isn’t showing the start of Bubble 2.0.

23. aaa
    

    July 9th, 2007 at 7:37 pm

    >WOW. VC’s invest in people not ideas, but this seems like too much money >even for Netscape founder.

    they invest as they themesleves are NEPOTS not ideas.

    onesite.com does the same exact thing.
    I have NO CLUE why this Ning would be anything of value beyond that.
    Just PR nd marketing bubble

24. aaa
    

    July 9th, 2007 at 7:38 pm

    hey invest in NEPOTS as they themesleves are NEPOTS

    great ideas they pass until some NEPOT pitches those to them
    In case of Marc he is actually a good guy from humble background but
    most of those funds work that way

25. Zarton
    

    July 9th, 2007 at 7:42 pm

    this is downright ridiculous. Marc you should start working on something
    of reach that could dethrone GOOGLE not another social startup that
    frankly with such valuation and what it does seems like ANOTHER
    OOOOPPPPWARE HOTAIRWARE not another Netscape!

26. Jason Davis
    

    July 9th, 2007 at 8:25 pm

    I use Ning for http://www.RecruitingBlogs.com and I think the site is amazing and the feedback I get from the over 300 members echoes the same. It cost me about $20 a month and this is so Ning does not place goole ads on the site. I would pay more if I could for things I would like that I have no idea how to build. I have no idea about valuations or stuff like that but this sounds like good news. They are always rolling out new features and respond to questions quickly.

27. Hashim
    

    July 9th, 2007 at 9:10 pm

    “We’ve scaled to 560 members and 120,000 page views ”

    scaled..?

28. Danilo
    

    July 9th, 2007 at 9:25 pm

    I don’t have a community there yet, haven’t thought about a nice excuse to create one yet but theres quite a bit of people active throughout the communities.

    Whats wrong with the business model running on ads? There is quite a lot of money to be made here, TechCrunch readers are too tech savvy to click on a link but again, what we see here doesn’t correspond to the real bulk of internet users.

    Plus, Ning has some monthly subscriptions as well for businesses. Its quite expensive I think, but at least they are doing it.

29. SorenG
    

    July 9th, 2007 at 9:38 pm

    Curious how Marc Andreessen stopped allowing comments on his blog. It was there, then gone. Did I miss an announcement?

    I have been impressed with Ning, but the money is their because Marc Andreessen is. Money comes to those who have it.

    I have been waiting three days to get a response back from one of their staff on a problem I was having with their technology, so maybe they are busy. But I have yet to be asked to join any group there, though I did create one mainly for fun.

30. Drama 2.0
    

    July 9th, 2007 at 10:25 pm

    “That puts the current value of Ning at a healthy $214 million.”

    I don’t think it’s healthy. As other posters have pointed out, it borders on the ridiculous. I commented in previous posts about Ning that the service is simply the Web 2.0 version of ezboard or Yahoo Groups. To my knowledge, ezboard runs a decent business, but it’s certainly not worth nearly a quarter of a billion dollars, and neither is Ning no matter how you evaluate the business. Ning will face the same problems as ezboard and Yahoo Groups (lots of failed and neglected communities create a virtual ghost town, successful communities outgrow the service and move on, etc.) and is likely to develop into a similar type of business.

    As several other posters have theorized, the funding likely has something to do with Marc’s status as a Silicon Valley luminary. And while investors invest in people more than they invest in businesses, guys like Marc are not the Silicon Valley equivalents of Jesus. In other words, they can’t perform miracles. The insane valuations given to Geni and now to Ning reflect irrational exuberance 2.0.

    http://www.drama20show.com/200.....-the-ning/

31. Shocked
    

    July 9th, 2007 at 10:56 pm

    This is really outrageous and if there’s any doubt in anyone’s mind that we’re on the verge of a serious market correction, just reread this announcement.

    This is not a very sophisticated site. It wasn’t that long ago that Ning was trying to be a roll your own Craig’s List and that didn’t stick. Legg Mason, the VC company, is making a huge mistake. MySpace.com or Facebook could kill this site in minutes — it’s far too fragmented.

32. cdo
    

    July 9th, 2007 at 11:16 pm

    Might be wrong but methinks it speaks volumes that marc’s path to this round of funding appears quite long winded (and maybe generated a few ff miles). According to his blog post, he used a banker (allen & co - last I checked, they usually don’t work for free) and the deal was led by a non-conventional funding source (certainly as far as consumer internet plays go)….what happened to all the valley VCs? Or was this ostensibly a ’strategic’ round?

    Pleased for the Ning team and hope this sets the bar low enough for a worthwhile exit for the ning founders/employees AND all the investors. And even if it turns out to be a shortsale (unlikely?), legg mason can absorb a complete loss - they are big boys over there.

33. Diego Doval
    

    July 9th, 2007 at 11:30 pm

    Hi SorenG, we typically respond to emails within 48 hours but as you note we’ve been busy of late. We will look into your problem and make sure we get back to you as quickly as possible. Thanks for your patience!

34. SIG
    

    July 9th, 2007 at 11:38 pm

    You don’t need $44M for a consumer software company, unless they are looking to acquire companies/content (e.g. HomeAway - Redpoint deal). Until LPs decide to cut back their allocations in PE/VC sector we will continue to see rediculous valuation such as this.

    I signed up for the site several weeks and was able to create a social network within a few minutes. Very easy to use and has most of the features needed to build a cool social site and has great functionality as well. I would definitely recommend this site.

35. chrisco
    

    July 10th, 2007 at 1:53 am

    Wow is right… There is a lot of money chasing yesterday’s dreams.

36. rick
    

    July 10th, 2007 at 5:00 am

    Hey, I’m just glad to see Marc is true to his advice on his blog. He said to raise a liberal amount of money and this is something he has done. Ever since Marc’s put out his blog I’ve been a big big fan of his, so more power to him.

37. John Smith
    

    July 10th, 2007 at 5:54 am

    Back in 1999 a friend of mine left his job to start an online music company, with no funding and no technology. A few weeks later I met him at a party and he told me he had just raised 140 million dollars in VC money.

    He wasn’t joking, either.

    At that point I knew the bubble was on its last legs- a blowoff top. Four months later the entire market started to collapse.

    This smells and feels exactly like then.

38. Concrete Stain
    

    July 10th, 2007 at 6:38 am

    This doesnt look good - that is too much money.

39. DAR
    

    July 10th, 2007 at 6:41 am

    SorenG:

    > Curious how Marc Andreessen stopped allowing comments on his blog. It was there, then gone. Did I miss an announcement?

    See: http://blog.pmarca.com/2007/07.....rackb.html

40. SorenG
    

    July 10th, 2007 at 7:11 am

    Thanks Dar — and Diego for help at Ning.

41. Clay Cook
    

    July 10th, 2007 at 9:08 am

    wow - congrats to the Ning team.

42. Jeremiah Owyang
    

    July 10th, 2007 at 3:54 pm

    This is somewhat amazing!

    I’ve been keeping track of this market industry, Ning has 60 competitors

    See this list of Companies that provide White Label Social Networking platforms

    http://www.web-strategist.com/.....platforms/

43. David
    

    July 10th, 2007 at 4:41 pm

    Oh c’mon - call Ning for what it is: bubble. I think you hit the nail on the head when you were looking for them a year or so ago. Maybe having a meeting with the hottie CEO changed your mind? :-p