After Selling Opsware, Andreessen Turns to His Third Startup, Ning

After Selling Opsware, Andreessen Turns to His Third Startup, Ning


By Adario Strange 
08.01.07 | 2:00 AM


When
Hewlett-Packard acquired Opsware for $1.6 billion in cash last week, it
changed the reputation of serial entrepreneur and web pioneer Marc
Andreessen forever.

Andreessen was the golden boy of the internet’s early days, but
Microsoft eventually pummeled his first company, Netscape
Communications, into a decidedly secondary market position. When he
launched Loudcloud in 1999 without any immediate or obvious payoff
potential, Andreessen’s critics had a field day.

But during the dot-com meltdown of 2000 and after, Loudcloud
refocused its business, renamed itself Opsware, and concentrated on
lining up customers. The company’s data-center-automation software,
which helps administrators configure and manage servers and the
applications running on them, is now used by more than 350 corporate
and government customers, Andreessen wrote in a blog post about the acquisition.

"I don’t think anyone else — large or small — has a comparable
product lineup for modern systems," Andreessen told Wired News. He
declined to state how much his share of the Opsware acquisition
amounted to.

Netscape and Opsware were both founded to help optimize the delivery
of content rather than controlling the pipes or the content pumped
through those pipes. That focus on facilitation has colored much of
Andreessen’s entrepreneurial career, and for his third act, Andreessen
is bringing a similar philosophy to the world of social networking.

Andreessen and business partner Gina Bianchini launched Ning
in 2005 as a platform to allow anyone to create their own social
network. Bianchini says Ning means "peace" in Chinese, but considering
the space she and Andreessen have targeted, peace will be the last
thing they’re likely to get in the coming months.

Ning’s goal is to offer social-networking tools for those with
little to no coding skill, but the site was initially suitable only for
those with at least a modicum of PHP programming knowledge. However,
Ning’s responsive tech support and nurturing community have helped the
site grow into a formidable web presence with more than 80,000 users, enabling the company to land $44 million in new funding just two weeks before the Opsware announcement.

But with that new funding comes the added pressure of delivering a
return on investment (previously, Ning was funded primarily by
Andreessen). Silicon Valley venture-capital investors typically look
for a minimum of 15-fold ROI, meaning Ning will have to sell for at
least $600 million to be considered a successful investment — a
disturbingly high bar to meet for a company that still hasn’t captured
the attention of most web users after two years in operation.

And then there’s the issue of market competition from other social-networking players. Translation: What about Facebook?

Contrary to Andreessen’s optimism, some tech veterans aren’t so sure
Ning can withstand the Facebook juggernaut. According to veteran tech
entrepreneur Jeff Pulver, "The reality is that Facebook … has moved
up the food chain and is no longer competing with anyone who is a
social network. It won’t be enough for the other platforms to open
themselves up with APIs. Facebook has the first-mover advantage and the
support of the developer community…. This is something that is not
happening anywhere else."

Andreessen bristles at comparisons with Facebook. "(Ning) is a fully
programmable platform, not just a way to inject features from the
outside into someone else’s network — like Facebook — but rather your
own network completely customized and programmed to work however you
want it to work," he said.

Also, Facebook applications remain wedded to the Facebook platform,
whereas with Ning, developers can take what they’ve developed using
Ning’s resources and move it to their own servers without any
involvement from Ning at all. That openness and flexibility may prove
an attractive alternative, once the bloom fades from Facebook’s rose.

Whether Ning’s more open platform will be worth $600 million when
it’s time to settle up is an open question. But considering
Andreessen’s track record, it wouldn’t be wise to bet against him.

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