Social Tools Not So Social Anymore

: Image via CrunchBase

Free software on the Internet has reached its sell by date, or at least that’s the implication behind Ning‘s announcement highlighted in Mashable’s post Ning:Failures, Lessons and Six Alternatives It seems the run away train of Ning’s success is screeching to a halt with a decision to focus the business on making money, as opposed to building a community, from which it can make money. Having passed the 1 million social sites mark the new management has decided to put an end to its freemium model and concentrate on providing tools to community builders who make money themselves, and will pay for use of the facilities.

This news follows hot on the heels of Twitter‘s announcement of a new monetization model, in that case through advertising. I guess everybody was expecting that move. Nobody can afford the costs of supporting more than 100 million users for ever. In the end everybody has to make money, and free software soon reaches its sell by date given today’s economic environment.

What’s particularly interesting is the way services to help other people make money using the Internet are developing into sophisticated business models. We’ve mentioned before that the only way to make money on the Internet is to charge others for helping them to do just that. It’s a development on the affiliate marketing, or MLM, model which has fallen into disrepute.

Over the past months we’ve seen other leaders of the social revolution turn their following, built on a seemingly altruistic philosophy, into a pool of gullible buyers. Instead of selling secrets of how to make money on the Internet they’re now selling secrets of how to make money on the Internet. Only now it’s turned into coaching and software.

Will it work? Will these new Internet entrepreneurs make money?

My guess is they will. There’s a bottomless pool of would be millionaires believing the stories of endless income from a couple of hours each day, wherever in the world they happen to be. Only $50/month for this book, $49.99 for this on-line course, $27.99 for this infrastructure complete with money making tools.

Will their hapless customers make enough to cover the cost? That’s another matter. But Ning won’t care if its customers don’t make money, just like the MLMers, and nor will the guys selling the coaching, the tools, the infrastructure. There will always be another punter willing to pay out small amounts for access to the secrets of Nirvana.

The only way to make money on the Internet is to charge people for helping them make money on the Internet. Free software isn’t the way to do that so we’ll need to find another way.

The free ride in social media is coming to an end (socialmediatoday.com)

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