Do Social Networks Belong in Business?

By Anna Maria Virzi Print this article Print

The popularity of myspace and facebook has prompted organizations to join the tribe.

When the first public relations pitch for an enterprise social network rolled into my inbox a few years ago, I initially dismissed the concept. After all, if you're social, like to network and have a respectable list of contacts in your address book, why bother with software or jump through hoops to sign up and log in to a network? Besides, what's wrong with good old-fashioned e-mail or portals to communicate with employees, partners and customers?

Today, an assortment of businesses are examining whether social networks should be part of an online strategy, much in the same way that blogs, instant messaging and other applications are tools to improve communication and collaboration. And some initiatives hold promise that social networks may not be a fad.

Interest in social networks has been attributed, in part, to News Corp. CEO Rupert Murdoch's decision last year to purchase MySpace for $580 million, followed by Facebook's move to blow open its network to a wider audience.

"MySpace and Facebook, with all the investment capital and publicity, have helped to legitimize social networks and left businesses wondering how they can use social networking technologies to their advantage," says Rich Lyons, a Chicago-based consultant working with several clients on enterprise social network initiatives. He's identified four different approaches that businesses have taken to deploy social networks.

Leveraging a brand.
Playboy Enterprises, publisher of Playboy magazine, last month launched Playboy U, a social networking site open only to college students. It features non-nude photos, videos and events, and generates revenue from advertising. "We like to think of Playboy U as a 'campus adviser' and expert on how to make the most of the college experience," the company said in a statement.

Soliciting user-generated content that can be shared with a wider audience. Fine Living TV, a cable television network owned by The E.W. Scripps Co., has invited viewers to post online videos showing their favorite hometown places. The Web site promises participants that selected videos may appear on the show, "We Live Here."

Encouraging innovation.
AAR Corp., an aviation equipment and services company based in Wood Dale, Ill., established a discussion forum to encourage collaboration. For instance, AAR executives asked workers to share ideas in the forum on how the company can best address global climate changes. "Through use of this tool, we have started to get input from anywhere in the organization regardless of organizational reporting structures," says Ben Sandzer-Bell, AAR vice president of strategic development.

Promoting commerce.
Comcast, a cable and Internet services provider, is testing out a social network called Fancast. It's billed as a destination devoted to TV, movies and celebrities; visitors can buy movie tickets through Fandango.

What should technology and business executives know before they launch a social network? First, the use of social network applications—like any technology initiative—requires business and technology leaders to address non-technology issues.

Jeff Killeen, CEO of GlobalSpec, an online community for engineering, manufacturing and other technical markets, advises that content on a social network be "vibrant, fresh and constantly changing," or else participants will lose interest. To make that happen, GlobalSpec initially assigned an engineer to answer questions.

Retaining a moderator was also key, in GlobalSpec's case to remove spam and police postings. A challenge: establishing guidelines on what's permissible criticism. "If it's personal, we'll edit it out," Killeen says. "If it's factual or a professionally stated opinion, even if it means it's a negative comment about one of our advertisers or advertiser's products, we'll keep it." Businesses must establish an information strategy, including policies that are enforced, advises Rachel E. Happe, research manager, digital business economy at IDC. "Understand your comfort level on what gets exposed and what doesn't," Happe says. "And make it very clear to all of your employees and partners. Then police the policy. Then nobody is surprised."

This article was originally published on 2007-08-23
Executive Editor
Anna Maria was assistant managing editor Forbes.com. She held the posts of news editor and executive editor at Internet World magazine and was city editor and Washington correspondent for the Connecticut Post, a daily newspaper in Bridgeport. Anna Maria has a B.A. from the University of Rhode Island.
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