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Summary:

Ning, the white-label social networking service, founded by Netscape founder Marc Andreessen, has raised a huge $44 million third round, amo…

Ning, the white-label social networking service, founded by Netscape founder Marc Andreessen, has raised a huge $44 million third round, among the biggest social networking raises thus far. The news was confirmed by Marc on his blog here. The round was led by the hedge fund Legg Mason with a number of other investors participating, including Marc himself.

The round was orchestrated by Allen & Co, whose big and private conference is happening in Sun Valley, Idaho this week. That explains why Marc is attending the conference.

Ning was founded by Marc and CEO Gina Bianchini about two years ago, and has received two small rounds from “Marc and his friends”. The company had languished after its first release last year, but an update of its platform in February this year seems to have moved the needle, the company says. The new money will be used in “scaling our operations to accommodate our traffic and growth; in our product design and development efforts; and in our platform evangelism and support programs.” Whatever said and done, that amount is crazy money…and the pre-money valuation of about $170 million or so being bandied around is about right, our sources tell us.

  1. Yes, pretty nuts. I have a question though: I don't know a *ton* about hedge funds but isn't the whole idea based on investing in extremely conservative properties that are negatively correlated with the rest of the economy? Meaning, a fund to hedge against internet (over)enthusiasm would be investing in, oh, I don't know, durable goods or international utilities?

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  2. Good point, though I am no expert in hedge funds either. OM might have some part of the answer: http://gigaom.com/2007/07/09/the-continous-commoditization-of-social-networks/

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  3. Strike that… not investing in conservative properties, but investing in ways that buck the general enthusiasm of things go up, up, and up.

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  4. This is absolutely insane. Ning is simply the Web 2.0 version of ezboard or Yahoo Groups and is likely to develop into a similar type of business. And that's not a business worth nearly a quarter of a billion dollars post-money.

    http://www.drama20show.com/2007/07/10/what-the-ning/

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  5. Totally nuts, makes the stomach turn for the investors who are making the investment.

    $170 million valuation based on what exactly? Nuts.

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  6. I think the valuation is partly based on the fact that Marc Andreessen is involved in the project. Your track record still counts in VC circles.

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  7. what track record? andressen was lucky enough to be at urbana at the right time. the guy claims a lot of credit for what was more shrewd timing than sheer genius.

    Ning is a total rip off of many other previous platforms. there is nothing even remotely unique about what they are doing. i think the round puts them in an interesting position which is PRODUCE. not make that money into something REAL. lets see real revenue to justify that investment. if netscape is any example, he will pump the value, get on a couple magazine covers and then tank the investment.

    price to earning at 3000:1?

    what a joke. how about EARNING 44M vs. being HANDED that money. whoopee! what's next, an article on bank robbers as investment instruments?

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  8. Let's see….NIng….where did I see this before? tribe.net. Wasn't THAT the white label social network that they are trying to redo?

    Ok, so Ning is Blogger for social networks. EXCEPT social networks require OPTING INTO them. which requires time. and often the social nets quickly veer off topic into something entirely different. which is why SILO-ING social networks is INSANE.

    Is anyone JUST an American? Or JUST a mother? Just a sister, californian, democrat, runner, vegetarian, chess playing, sudoku loving, cross word puzzling, bridge playing texas holdem winning, ex-drinker, in therapy, christian single, Ivy grad. lawyer, doctor, lesbian, feminist, hippie, single mom, indie band loving, folk singer, artist, poet, swimmer, dog lover? And can't lesbians who love dogs who are democrats ALSO hang out with Right wingers who love dogs and are Ivy Grads? Do we HAVE to join ALL the clubs? Do I need a recommendation engine INSIDE the social network watching all the clubs i SHOULD join but didn't know i would like? "People Who Joined This NING Also Liked THose Nings…"

    How many clubs can anyone person really monitor? in which case, what is the real point? we start in one club, then join several, then start merging them into one another and then we find ourselves right back into the same message board, blog miasma of the past.

    I don't want MORE social networks. I want better content from people that can recommend what i want — wherever I am. I don't want to manage YET ANOTHER FEED. I don't want YET another data silo. I don't want YET ANOTHER DESTINATION! What I want, is easy, open, access to all the world's most relevant information — when i am looking for it. i want INSTANT community around the discrete topic in real time. I don't need some stale, landfill of posts from 2003. I don't care about the "community" for its own sake. I care about what I need NOW. I need to DO something, not just hang out at YET ANOTHER insipid porn-spam-trolling identity-capturing Russian-mob fraud front end.

    For god's sake, kill the web page already. kill the home page. get rid of content mgt systems. why doesn't google just host everyone's web site and then index what i want EVERYWHERE and point me to it. then bolt on a "ad hoc" community around that item or items. NO JOINING, no managing. let people who care about any ephemera gather ad ho. and then let them dissolve it just as quickly.

    e.g. let's say you are on a bus. someone that is reading a book you were thinking of getting sits near you. you ask them a question. "what do you think of that book?" they might give you a recommendation. then you strike up a conversation that goes orthogonal to the book topic. you learn that yo uand this person share similar tastes. they might tell you where they saw a band, where they ate, you might even play the name game and learn of similar friends in common. but that is probably where it will end. the NEED was satisfied. you don't need to REGISTER each other, ping each other, buddy each other, email each other, TWITTER each other, blog the experience, Flickr each other, comment on each others' blog and then track back, podcast the experience and then join a social network about the experience and then YELP the recommendations.

    F**** that.

    No more Big Box web models that try out destination one another. just stealing the same fickle bunch of HYPER communicators from each other. Raising more and more money pretending that there are NEW users when in fact they are sharing the SAME users.

    This isn't a value-add to the web world, this is a net-loss in terms of productivity and value.

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  9. $44 million, thats a lot of money. Seems I'm in the wrong business.

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