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Interesting. It's kind of like taking away the funnel that leads to paid accounts. Though you could argue the free accounts that Grouply is taking from Ning are accounts that would never pay anyways... so is there something else Grouply is after, other than growing in terms of users/networks?

It's the nature of web applications, for common applications at any one time there will be someone who are prepared to be offering a free service or at least a freemium one. I guess at some point Grouply will look to monetize their platform and someone else will step in and offer a free service.

Maybe we can see the process as:

- Ambitious Startup tries something

- Some fail, but not completely. A clear demand for a certain service is created, but it does not contain a business model that can sustain the size or investor expectations of the startup.

- New leaner startups pick up the pieces, providing the service in a now known domain with low costs. The new startup might be able to provide the service even with the lower returns.

The question is, what is Grouply's capitalization?

Good timing =)

Grouply welcomes Ning networks