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What Ning’s cuts say about the future of free

SmartPulse — our weekly reader poll in SmartBrief on Social Media — tracks feedback from leading marketers about social-media practices and issues.

Last week’s poll question: Ning recently announced that it was shutting down its free service, telling site owners they must either pay up or go elsewhere. Does this move suggest that the “freemium” business model is a thing of the past?

  • Don’t read too much into it — Ning’s move was driven by other factors  36.09%
  • Not at all — “free” is a good word and freemium can still work  31.58%
  • Yes — freemium was never a good business model  18.05%
  • Everything on the Web should be free  7.52%
  • Yes, but only because the current economy does not favor the freemium model  6.77%

I’m going with the majority on this one. The tell here is that Ning laid off 40% of its workforce. Even though the company raised a round of serious investment capital and has a valuation of as much as $750 million, it obviously wasn’t bringing in enough revenue.

I don’t know what Ning’s ratio between free and paid communities was, but apparently it leaned quite heavily toward the free side, and advertising is not the golden goose in this case.

The question is, how many Ning network sites will swing from free to paid and how many will opt-out? If you are a Ning network creator, what are your plans? Should you choose to look elsewhere, Mashable has a list of six alternatives. “[W]hat we do know is that the dotcom-era free-for-all of apps, services and content for end users is not-so-gradually coming to a halt. In the light of economic reality, nothing is free,” writes Mashable’s Jolie O’Dell.

What do you think? Is this the end of free?

Paul Chaney is an Internet marketing consultant and speaker on the topic of social media. He is the author of “The Digital Handshake” and a member of the SmartBrief on Social Media Advisory Board.