Why buy Ning? Aside from the obvious aspects — more scale and better stats for a possible IPO, an expanded ad network, subscription revenue — Glam Media Chairman and CEO Samir Arora is into control.
Glam, which bills itself as the leading network for women, already had its own ad platform and recently launched its content systems for online and mobile but stopped short of a DIY social network. Arora told paidContent: “After doing our work, it was clear to build Facebook in a box was an enormous amount of work.” Instead, Glam went shopping.
“We started to explore and shortlisted Ning as the best contender.” Ning, cofounded in 2004 by Marc Andreessen and Gina Bianchi, claims 100 million registered user social profiles with a reach of more than 60 million monthly uniques. (After removing duplication, Ning should add 40 million monthly uniques to Glam’s 200 million.) Its status had changed considerably from the days when it raised $119 million dollars and had a valuation of $750 million; in 2010, it changed from a model seeking scale and traffic to one focused on paying customers.
Why not just make a deal to use Ning’s technology? After all, that’s what a white-label social network is for. “We actually did do a deal with them secretly and used their platform last three months,” Arora said. “But we want to own and control all technology for media.”
Acquiring Ning gives Glam ad, content and social platforms — and a subscription revenue stream at the same time.
Ning has more than 100,000 subscribers paying anywhere from $20 to $240 or $600 a year. (Monthly rates are $3, $25 or $60 depending on the level of the plan, with discounts for annual payments.) I’m told most of the subscribers are enterprise users in the top two tiers but the details aren’t public so it’s hard to know for sure.
“Creators” can sell ads in certain positions without paying the company a split but Ning gets a cut if they charge for access. That seems like a natural place for Glam to use its own revenue sharing models for advertising. After all, that’s how ad networks operate.
But Arora says Glam has no plans to change that: “We will let you do whatever you’re doing with Ning.” Instead, Glam will offer Ning subscribers additional advertising opportunities. Glam currently has two versions. As Arora describes it, Glam 1.0 pays independent publishers a straight rev share, while Glam 2.0 gives Glam ownership for all the content and pays publishers “lifetime” residual rights in the form of rev shares.
He also plans to stick with the pay-only model that Ning switched to last year. “My intention is it’s working, leave it alone.”
When I asked in a follow-up e-mail if acquiring Ning make Glam more attractive for a possible IPO, Arora declined comment on the potential for taking the company public. Then he added:
“Other than that, Ning adds a tech platform, 100,000 publishers, subscription revenue, and a great silicon valley team- definitely makes Glam a much larger tech media company.”