Susan Hall talked to Craig Carpenter, vice president of marketing for information-management company Recommind, about the potential risk associated with companies’ use of Twitter.

Hall: So what is the potential cost of companies using Twitter?
Carpenter: In some ways, Twitter is not terribly different from Facebook, YouTube, stuff like that or even e-mail or instant messaging. …

The thing about Twitter that a lot of people are talking about – I don’t know of any enterprises that are really dealing with it terribly proactively today -- the thing that’s different about Twitter is the sheer volume of communication that it fosters and how people don’t really think and vet their tweets before they post them. First there’s the speed. Then there’s just the lack of vetting and proof-reading, if you will, as people are tweeting on their cell phones, for example.

The other thing is how people kind of blend business tweets with personal tweets. …It’s not hard to imagine reading a tweet that’s really not something I really care to know about, but also presents a conflict of interest for that [business person].

Hall: I understand that it’s easy for context to get lost.

Carpenter: It’s such a rapid means of communication, things can get lost or misconstrued. Context can be lost and, by its nature, things are often ambiguous. If there are two different interpretations of things, often times we chose the more negative of the two, for whatever reason. Maybe we’re all closet cynics.

I started my career in a law firm where there was this older partner who thought e-mail was so dangerous because people don’t re-read the e-mails they have written before they send them. It’s not like when you wrote a letter or dictated a letter and went back over it and thought, “That part could be misconstrued.” Facebook, with its ability to project a message to a very wide audience, makes e-mail look like child’s play. Then along comes Twitter, which not only allows you to project a message to thousands, but it’s very truncated. For people who are posting 10 or 20 tweets a day or more, how much time are you putting into thinking about it and looking into all the people who are following you to make sure there’s not someone there who has negative (motives).

If you’re a lawyer wanting to sue Procter & Gamble, and an executive or someone working on a new product is using Twitter, you’re going to look for the most negative and potentially damaging permutation of a particular tweet that you can. It’s just a matter of time before something that at a minimum is ambiguous can be used in that way…. It will happen before the end of next year, for sure. You can take that to the bank. And that’s when people will start to stand up and take note of it.

Hall: Do you expect companies to rein in their employees who use Twitter?
Carpenter: Yep. That’s exactly what will happen. It’s a lot like instant messaging in the speed in which communication can happen, though IM is more one-to-one, so it’s much more contained. But [the wide audience] is what makes Twitter so powerful.

At a minimum, companies should have a policy that says no one can use Twitter for business purposes, or these groups of people can, but here are the guidelines that they use. That helps, but that doesn’t stop people from using Twitter. A policy is only as good as its enforcement. If there’s still a tweet or a series of tweets out there that could be damaging to the company, a policy is not going to help you at all. … So the enforcement scenario with use of Twitter is kind of the next step after you go through the policy step  -- and that gets a lot more challenging. It’s very difficult to allow people to do their jobs and allow them the freedom of communication and access with their laptop or their PC, while enforcing the policy with Twitter. Companies could block Twitter, but then people could do it from their BlackBerry or their iPhone.

The best way to deal with this is to educate your people about the possible ramifications, then really start pointing to the scenarios where companies got hit when an employee didn’t take all these things into account. …It’s kind of like training about discrimination or harassment. People kind of pooh-pooh it until something bad happens, then we kind of all stand up and take notice.

Hall: Is there any way to put a dollar figure on the risk of using Twitter?
Carpenter: This is an area where it’s really hard to measure risk. For bigger companies with lots of employees tweeting about things that are business related or borderline business related, the risk is, for sure, in the millions or tens of millions of dollars, and potentially for some companies could be in the billions. That’s not going to be an everyday thing, but as an example, say you have a big pharmaceutical company that has a drug or series of drugs that its working through various phases with the FDA. All someone has to do is post a tweet that has to do with the results – either they’re better or they’re much worse – and then you have a situation where the stock goes either up or down. It’s almost a knee-jerk reaction when you have securities litigation that follows. It you have Pfizer or Merck, their stock swings are in the millions of dollars. It’s not hard to imagine a scenario where a single tweet could result in tens or even hundreds of millions of dollars or even billions for that very reason.

It’s probably unfair to Twitter to only look at the potential downside without looking at the benefits. I don’t think we as a company --  or I don’t know that anybody has -- been able to quantify the benefits yet. So it’s always fair to do a cost-benefit analysis if you have the capability to do that.

Hall: It does hold the potential to hurt the company’s reputation or brand, though.
Carpenter: Big time. The best case would be an inconsistent message where they’ve been pushing a product to do X and someone tweets a message “I can’t believe we did this. The product doesn’t even work to do that.” It’s like the case where the financial analysts were pumping certain stocks, then in e-mail they were saying “These stocks are a dog,” and things like that.

Hall: It would seem to make archiving and e-discovery that much more difficult.
Carpenter: It is an awesome task  This potential risk of data just sitting there and not dying has led a lot of companies to want to delete data. So now there’s proactive information management, which is a fancy term for “let’s start deleting this stuff.” This has really started to get a lot of attention from bigger companies. You can look at it from a bunch of different angles. The first is this risk component, the second is this storage cost, and just two weeks ago we released a product  -- a lot of companies don’t even know what data they have, what they have to keep, what they can get rid of, what should be on legal hold. A lot of projects are starting to get funding now to go through that process. And this risk, from e-mail or Twitter or whatever, with risk in the millions, it doesn’t take much to justify trying to get rid of this stuff, so that’s getting a lot of interest today.

I’m not aware of a case in which Twitter was at issue in the case, but that will certainly change this year or early next year. So that means courts haven’t yet looked at this stuff and figured out how to handle it. They’re just now getting a good handle on e-mail. E-mail is much more fleshed out at this point – and I would throw Facebook in there with Twitter, and even MySpace – so this is incredibly dynamic and evolving landscape. So the next one to three years should be really interesting because we’ll all start to figure this stuff out, and by the time we start to get a handle on it, there will be five to 10 new things. The next Twitter, the new Facebook, or whatever.