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FC: OMFG, Like, Totally, Ning

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FastCompany has unloaded the biggest piece of Turducken shaped in the form of a cover story on Ning, in the latest issue. And for once, Valleywag is actually tame in its skewering of the story. In terms of hype, this is of BW-cover-story-on-Digg proportions (hence the similar headline in my post). Keep in mind this is a post about the lameness of FC’s story and the hype its journalist spews in this story…Ning has all the right to hype itself however it wants.

Some pompous gems from the story: More after the jump…

— Red flag phrases: “viral expansion loop”; “self-replicating, borglike”; “stackability”; “phantasmagorical growth”; “automagically”. Magically minted words.
— “The secret is what’s called a ‘viral expansion loop,’ a concept little known outside of Silicon Valley (go ahead, Google it — you won’t find much).” Of course you wont’ find it on Google (NSDQ: GOOG). Cause it’s some B-school phrase meaning viral growth, which you’ll find everywhere on Google.
— “You can build a billion-dollar business from scratch”. Um…where?
— “It’s not unlike taking a penny and doubling it daily for 30 days. By the end of a week, you’d have 64 cents; within two weeks, $81.92; by day 30, about $5.4 million.” Keep in mind, there is no proof that’s actually money we’re talking about, in Ning’s case.
— “The company estimates that, at this rate, by New Year’s Eve 2010 it will host some 4 million social networks, with tens of millions of members, serving up billions of page views daily.” This is exactly how Clay Shirky brilliantly dissected the Second Life hype, also in the pages of Valleywag. Active social network numbers, please?
— “Which is how Ning has been able to grow at a daily average of more than .4% and add 500 new groups a day, doubling roughly every 137 days. ‘It’s the power of compounding, predictable growth rates,’ Bianchini says.” Actually, no, if it is viral, then no way it can be predictable. And yes, as Vwag points out, whatever the growth is, it won’t be sustained. Period.
— “When your currency is ideas, people become emotionally attached,” Ning’s Bianchini says. “Then you become a public utility like Blogger, YouTube, or Facebook.” Um, again, no. Ning is not a public utility by any stretch of imagination…if the whole idea for Ning is mini-social networks for groups, then those groups are self-limiting by definition. And hence, no way Ning will ever become a utility…especially with tons of alternatives.
— “Lehman, in its latest report, predicts that the domestic online-ad market will grow 23.6% in 2008, to $26.2 billion. Ning’s “billions” of predicted page views would leave it poised to claim a nice slice of that revenue.” Proof? X percent of inconsistent and unpredictable pageviews, is still, well, inconsistent when it comes to revenues.
— “Viral expansion loops have long existed in the offline world.” Um..what was that part about “a concept little known outside of Silicon Valley”?
— “Significantly, viral-loop networks don’t create content — they organize it. They provide an environment that is, in theory, almost infinitely scalable, and then rely on the wisdom of crowds to create or aggregate masses of material to fill it.” Almost infinitely scalable? Really?
— Andreessen points out that “eventually, everyone tends to be on such a network, the way that everyone has a telephone and everyone has an email address, because the value to being on it is so huge as a result of everyone else being on it.” True, only in this case, on any one of the social networks, not on a Ning network. So the utility is connection through social net, not any one company.
— Nicholas Economides, a professor of economics at New York University’s Stern School of Business, characterizes this as “a network effect.” See, it is that simple…all the words written before this were just words strung together to say just that.
— “As NYU professor Economides reminds us, ‘being big doesn’t necessarily mean you will make a profit.'” Thank you, sir.
— “Ning swells like a river fed from an ever-growing number of tributaries.” I think I just threw up a little in my mouth.
— “Then no one can stop it.” Stop it, please.

And for the record, I actually think FC 2.0, under Mansueto Ventures, is much better than the predecessor, both in terms of the quality of stories, and in terms of staying away from the “FreeAgent Nation” tangle of hype spewed out during the first boom. The company is a partner of ours for the EconSM conference. If you see them limping at the conference, well, for this one, they deserve it.

17 Responses to “FC: OMFG, Like, Totally, Ning”

  1. Ning is little more than a free website maker for those who want something for nothing and who will end up largely speaking to a mere handful of people or fewer.

    The hype surrounding this site is akin to what drove the overvaluations of Facebook, and Skype among others. It is a free website maker for those who can't code their own or don't need to design one on their own and who will offer reams of useless information to the tired, websnarled public.

    Remember the huge ad dollar possibilities that were bandied about how online gaming would have product placement and advertising placed throughout virtual worlds that could produce massive amounts of revenue?

    Yeah, nobody else does either.

    Ning will have thousands or millions of web pages with trillions of ads that are routinely ignored by users. Get over it. The internet as a method to advertise products or services is proving itself to be a huge bust.

  2. Paul Nilsen

    I don't know why KickApps isn't blowing Ning out of the water (or are they?). The look and feel of their interface and of their networks in general is light years beyond Ning in my opinion.

  3. All Fast Company has done here is bring to light a well-conceived business model in a sea of social sites which have no real value other than on paper. What's wrong with pointing out that Ning has found a way to double their audience every half year and commercialize them instantly without the negative press and user backlash that plagued facebook's attempt to become a legitimate money-maker? So the article might be a little over the top but isn't that just a function of the same journalistic style you've used in this post to bash it?

  4. Sven Lampert

    I dated Gina a while back for a brief period of time. She definitely has a sensuous, piercing glare about her. She lost interest in me quickly; my friend said I was her boy toy until she got bored. For all I know he could be right. Either way I think she looks amazing on the mag cover.

  5. Seems Herb Allen of the little known investment bank Allen&Co;. seems to disagree with Rafat. Couple weeks after the Fast Company story ran, Allen and others invested another $60 million in Ning. $500 million valuation. If you could own a piece of Ning, or a piece of PaidContent, which would you choose?

  6. Rafat, spot on! FC used to be a top read for me. I'm shocked at this. Journalism it isn't. I hope for Adam Penenberg's case he gets a similar book deal to Sarah Lacy . Will he be interviewing Gina on stage at SxSW 2009? I can't wait for that debacle.

  7. i had a meeting a year ago with GB and found her to be clearly smart but incredibly pompous. that said, i have set up my own little social network on ning for a hobby (and it now has ELEVEN members!). Ning has some pretty good and simple functionality and the google ad words are very targeted to the hobby. but i bet they've made a total of 10 cents from my little network so far.

  8. Ning = non event

    Hilarious – I think ning is the biggest blah out there. How do you wake up one day and decide to be a platform… there is no such model you either have an audience and a user base for others to develop on or you don't..

    ning is clearly trying to get itself sold asap and from what i can tell it's another nothing web 2.0 except for the fact the GB looks good in the tank top.

  9. Lurker 'til now

    Very amusing review. I leafed through FC on the newsstand and made a mental note to try and find the article online later.

    I joined Ning a while back after Chris Anderson mentioned it and I find it totally useless.

    Gina looks really good in that tank top though.