Growth of Online Social Networking in
Business

The growth of online social networking in business falls somewhat in the realm of unintended consequences. Online social networks, such as Facebook and MySpace, were supposed to change everything. Most experts believed that they would become the horsepower of the new economy, driving new customers to businesses and ad revenue that more than paid for itself.

The reality is that sites like Friendster or Xanga barely held on after reinventing themselves and their purpose multiple times. It turned out that people were far too busy interacting with each other to really take the time to go buy much, and they tended to resent efforts to increase advertising, or, even worse, the use of their online profiles to generate marketing profiles.

On the other hand, it turns out that the real benefit to business lies not in the customer base, but in the connections that are possible between businesses themselves. As the networks grew, they began to operate according to "Metcalfe's Law," which is the power of a network to grow in proportion to the square of the number of its nodes. This theory shows that as a social network grows, the value of being a member becomes exponentially more valid.

This value has less to do with who to sell to, and more to do with connections for business contracts and strategic advice. Social networks are new enough, and easy enough to access, that many of the previous barriers to influential people are no longer there. For example, in the past you would not be able to phone a CEO, but today it may be possible to find that CEO's introduction through a site such as [1].

On the other hand, ZeroDegrees.com, which was one of the "up and coming" business-oriented connection sites, was bought and simply parked by InterActive Corp. Interactive is a company which has invested in a number of successful social and web 2.0 companies such as TicketMaster, Match.com, and LendingTree.com. Whatever actually makes one social networking site successful, while another may fail, still seems to escape many of the experts in the field.

Here are some of the ways that social networks have been used by businesses:

• Functioning as an online rolodex, often with much personal information
• Connecting with experts and sources when researching proposals
• Develops a more immediate connection with business contacts
• Puts businesses in touch with a widespread work force from which to gain exactly the right people for a given project.
• Useful collaboration tool for meetings with people in disparate locations.

In some ways, the social networks are as much a revolution to the business world as the telegraph and telephone were. But that kind of connectivity does not come without a price.

With the volatility of the web and the business environment as a whole, it is not always easy to be sure that you have actually picked a social network service that will last. Businesses that were heavily integrated into the aforementioned ZeroDegrees.com had to start again from scratch when the company's website went away. Even relatively stable social networks such as Facebook suffer outages and service interruptions that can bring a corporation to a standstill if they rely on it for their communications.

There is also a danger of information leakage. Any given social network is made up not of companies and official policies, but of humans, and more than that, humans with a desire to reach out and make contact. As a result, not only can they reveal things about the company that may be better hidden, but companies may also find out more than individuals are comfortable with on a social network profile. It is usually a good idea for both employees and corporations to set forth very clear guidelines as to what is and what isn't allowable in the use of these sites.

With those caveats in mind, however, it is clear that social networks are more than just a benefit to businesses in the internet age – they are a necessity..

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