Dial-Ning for Dollars ($44M to be Exact)

Either Ning has really nailed this whole social networking thing or some heavy-duty institutional investors have bought hook, line and sinker into the Church of Marc Andreessen.

How else to explain Ning raising $44-million to expand its do-it-yourself social networking service. Sure, Ning is interesting and definitely trying to play in a red-hot space right now (always a good thing for a start-up) but $44-million? All I can guess – or, at least, hope is Ning’s traffic, revenue and users are going through the roof as social networks become the tool people use to communicate and arrange their lives.

Then again, maybe this is just another investor session of Simon Says (or, in this case, Marc Says or or Ning co-fonder Gina Bianchini Says). Simon Says social networking is increasingly popular. Simon Says invest in social networks before the become monsters and it’s too late (e.g. Facebook). Simon Says Marc Andreessen a really smart guy so Ning has to be something special. (TechCrunch suggests Ning now had a pre-money valuation of $170-million. Using 10X sales as a rough guide, Ning could have revenue of about $20-million, which would be impressive).

As for whether Ning suggests we’ve entered or entering an investment bubble. I’m still on the fence because what you’ve got is well-financed institutional investors and cash-rich companies (Google, Yahoo, Microsoft, eBay, etc.) making these investments as opposed to overly-excited retail investors jumping into IPOs. Another theory is there is a bubble happening except it’s just swirling around Silicon Valley for the time being.

More: Rob Hyndman is skeptical about Ning based on his so-so experiences with it and the fact he knows few people who actually use it. Don Dodge is also puzzled based on fact he doesn’t think Ning’s revenue will scale with audience growth. Using some back-of-the-napkin calculations, he figures that Ning’s investors are looking for a $1-billion to $2-billion exit. Wow!