Ning is a social publishing platform that allows users to create their own social websites and social networks. It was founded in 2004 by Marc Andreessen and Gina Bianchini as a stealth startup called 24 Hour Laundry. The Palo Alto, California-based company changed its name to Ning, which means peace in Chinese, in October 2005. Ning lets people create social networks around special interests and thus cater to a specific audience. It offers a programmable platform for developers who wish to change the features and underlying logic of their social websites, while non-developers can use the customizable template to set themes, change color and features like blogging, creating groups, photos and videos and create a full-featured network. In late 2007, Ning became part of Google’s OpenSocial API, allowing developers to run OpenSocial widgets within their networks.
Ning gets revenue from two sources: contextual advertising and premium services. The company runs ads powered by Google AdSense, with the proceeds going to Ning on the free networks. Under the premium service program, Ning allows users to buy additional features for their social networks. These include options like additional storage and bandwidth, and Ning also lets users control ad content for a monthly fee.
Ning is also being used by educators to develop educational resources. One example is that it was used by educators in S-GI for a book study on curriculum mapping. The ISTE Special Interest Group for Teacher Educators used Ning for a discussion group for the book Reinventing Project-Based Learning: Your Field Guide for Real-World Projects in the Digital Age. The features were customized to allow participants to upload pictures and videos of student-developed projects as well as links to blogs and Flickr.
The company has raised more than $104 million so far. It raised an undisclosed sum internally in the first two rounds from Marc Andreessen and others. In July 2007, the company announced that it raised $44 million in a Series C round led by Legg Mason and a number of other investors, including Marc Andreessen. In April 2008, it raised another $60 million from Allen and Company.
In August 2008, Ning had 390,000 social networks on its platform. Traffic too has been growing steadily. According to Quantcast, Ning attracts 3.6 million US monthly uniques. VentureBeat reported that Ning’s traffic increased by 4,803% between February 2007 and 2008. But the article further stated that such stats are useless for Ning’s white-label service and some features are not accounted for by panel estimates.
The company was valued at $560 million after its last round of funding. Mark Andreessen clarified that the new money was not needed to make the company cash positive given its current growth rates, it is unclear what Ning intends to do with the money it has raised. It is an exorbitantly-funded compared with competitors like Wetpaint.
We have no estimate of Ning’s revenue numbers, but to be valued at $560 million, I would imagine they have hit at the minimum a $56 million annual run rate. If they haven’t, and investors are giving them such a bombastic valuation, then I would have to question their wisdom.
This segment is a part in the series : Deal Radar 2008