Ning Shuts Down Premium Developer WidgetLaboratory

Ning, the build-your-own social network platform, has removed all widgets created by popular premium developer WidgetLaboratory. The news has come without warning and is being met with outrage by a number of users who have spent hundreds of dollars on the widgets to build up their social networks. WidgetLaboratory sells its widgets for around $30 a month, and has managed to become the most popular widget creator on Ning’s platform.

WidgetLaboratory has posted a notice to its site explaining that it has received no explanation from Ning, and speculates that the shutdown is a result of anti-competitive behavior rather than a breach of the ToS – it’s possible that Ning saw that the company was making a sizable amount of revnue, and was worried that it might make a grab at its users. The site has also posted a form asking users how much they’ve spent on their widgets so they can be properly compensated (apparently through a lawsuit).

Update: We’ve been digging into the story and it appears there’s another side to this. We’re hearing that WidgetLaboratory may have been displaying a pattern of questionable behavior and that they were given “ample warning” and a chance to correct their actions. Ning isn’t commenting on the situation, so the full story may not ever be fully understood.

Here’s an excerpt of WL’s statement (the emphasis is mine):

As of this morning, August 22, 2008, we learned from our customers that Ning had unilaterally removed and all of its products. We have received no formal notice or explanation at this time. We have not violated any Terms of Service, nor have we violated any published “guidelines” from Ning.

This action by Ning was completely without any notice, was without any merit, and in our opinion was done for the sole purpose of eliminating a company that had started to provide a useful and valuable service to all of you. We have a full and complete documentation of our relationship with Ning from the very first moment that we contacted them in November of 2007 and met with them subsequently to get their blessing for creating our company and products. The facts and details contained therein will substantiate our claims regarding Ning’s actions.

We have achieved a level of market penetration into the Ning community that has made WidgetLaboratory a somewhat “essential” resource for add-ons and widgets. Based upon the personal phone calls and correspondence from the entire Ning team, including their entire Executive staff, it would appear that they decided to elminate WidgetLaboratory for anti-competitive purposes alone. This is truly ironic to us, given the fact that our products have demonstrably INCREASED the popularity of Ning and caused more customers of Ning to purchase their Premium Services. This was truly a win-win-win relationship between Ning, WidgetLaboratory, and all of you.

Ning has responded by explaining that WidgetLaboratory has violated the social network’s Terms of Service, but says it won’t be providing any more additional details to the public.

This morning we removed WidgetLaboratory, a third party application developer, from the Ning Platform for violating Ning’s Terms of Service. WidgetLaboratory provided independently developed applications that could be added to a social network on the Ning Platform by a Network Creator. While we try to be as transparent as possible, it’s our long standing policy not to comment on specific cases where we remove networks or third party developers from the Ning Platform so we will not be providing any additional details publicly.