Would-be Twitter rival App.net today shed some light on its first major round of subscription renewals, and the outlook isn't so good. The "state of the union" starts off on a positive note, revealing that App.net has tallied enough renewals for the service "to be profitable and self-sustaining." Operating and hosting costs are covered, and co-founders Dalton Caldwell and Bryan Berg claim that App.net will "continue to operate normally on an indefinite basis."

That's where the good news ends. 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. "Dalton and Bryan will continue to be responsible for the operation of App.net, but no longer as employees." Contracted workers will continue to be paid for supporting and improving the product.

App.net will keep going as long as there are customers to support it

Starting today, App.net says it will begin to open source a larger percentage of its core codebase. The move allows community members to step up and add improvements and contributions of their own to push App.net's mission forward. "The continued support and interest of the App.net community is vital the continued health and wellbeing of the platform." Caldwell and Berg say their intention is to keep App.net running as long as there are customers using and supporting it. "We continue to believe in the usefulness of a sustainable social platform where users and developers are customers, and not the product being sold to advertisers."

App.net was created with the help of crowdfunding and a promise that it would steer clear of ad-based revenue. Caldwell envisioned a "better" and developer-friendly version of Twitter with a focus on users. But moving away from ads meant people would have to pay for that experience. To its credit, App.net has accumulated over 200,000 users and a talented developer community, but the road forward looks very uncertain.