Social Networking Can Work for Business

MySpace is giving social networking a bad name. Or at least a reputation for bandwidth hogging, spyware distribution, and a whole passel of questionable ethics too numerous to mention.

But are social networks all bad? Nah. It turns out that companies ranging from Microsoft to Starbucks to Deloitte to Intuit are finding good uses for them -- both inside and outside their corporate firewalls.

Companies are using them to recruit employees. Deloitte is experiencing particular success convincing former workers to return to the fold (thus saving the company big bucks on training) via an alumni networking site.

In fact, networking sites and collaboration tools may become a necessity for companies trying to attract the best and brightest IT talent, says an executive of investment bank Dresdner Kleinwort, an early advocate of wikis, blogs and other so-called Web 2.0 technologies in the enterprise.

New hires want to work with the same kind of highly flexible, Web-driven tools that they have become accustomed to as tech-savvy consumers, agrees Harvard Business School professor Andrew McAfee in this interesting interview with Optimize.

Social networking also provides a way to enlist customers to help with market research, viral marketing and even customer support. Fact: Some 70 percent of inquiries on Intuit's Quicken forum are answered by other customers rather than by Intuit itself. Intuit is planning to beef up the forums with blogging and podcasting tools.

In at least one sense, companies should evaluate social networking tools the same way they would a more traditional productivity tool. That is, they must make sure to select technologies that are well suited to their specific user base and business needs, in particular ones with the ability to scale.

It's also important to weigh the considerable benefits of a more open environment against the possible risks of implementing it. And in the interest of protecting reputation and intellectual property, companies must figure out a way to exert the appropriate controls when necessary -- a tricky task that flies in the face of the transparent nature of Web 2.0.