Apparently the renewal rate wasn’t high enough to leave a sufficient salary for App.net’s full-time employees (including Caldwell and Berg). Moving forward, App.net will no longer employ any salaried employees.
The next time someone criticizes Facebook for ads or monetization of user data, be sure to show them the above article so they can see what the alternative (for all social networks) is.
Contrary to what privacy alarmists would have you believe, free web services like Facebook and Twitter don’t run on air and pixie dust.* Every web service needs a revenue stream to keep running. As demonstrated by App.net above, user-paid social networking simply isn’t a viable business. Period.
This leaves every free web service with only one option: to monetize the assets they have on hand. Those assets are their users and associated data.
*Neither is data on you actually yours, but that’s a separate discussion.