Social Networking and the Business: Friend or Foe? - Page 2

Feb 11, 2008

Julie Craig

Who knew that online auctions would become a national pastime and spawn thousands of small businesses? Who could have anticipated that people would pay cash money for Linden Dollars (L$), and, in turn, use those dollars to buy virtual real estate and equally virtual body parts? And for those among us who flee from friends and coworkers waving vacation scrapbooks, who would have ever anticipated that 14 million people would interact with FaceBook during August 2007?

The growth of social networking makes it very clear that collaboration may be more important than many of us might have thought. It is also becoming clear that people are seeking and finding new ways to interact, and that this interaction includes more ways to make money online than anybody ever suspected.

Smart IT executives will undoubtedly seek ways to make their own observations and figure out how to use them to benefit the business.

Social Networking as a Business Asset

At a recent analyst conference, IBM presented a product demo in Second Life. Now, while Second Life is still somewhat cartoonish, it is three-dimensional and provides a much richer experience than, say, a PowerPoint presentation. I was struck by IBM’s ingenuity. I’m sure that other vendors are leveraging Second Life and other such sites as well, but this is the only presentation to date that I have attended on Second Life.

As I watched the presentation, I was struck by the fact that social networking sites enable collaboration on a grand scale. I could see Second Life beginning to displace presentation platforms like WebEx over time because of the more compelling interface and the presenter’s ability to tweak a presentation in real time. Although I haven’t heard about any such inroads to date, I would venture to guess that, within the next two-or-three years, social networking sites will start to impact the sales of traditional collaboration and presentation platforms because of their hosted nature and ease of use. It is likely that more than one CIO is evaluating Second Life for applicability to enterprise collaboration projects.

Within this framework, social networking sites can also be viewed as potential sources of hosted applications, especially as they mature over time. Since most such sites are currently designed for private end users rather than businesses, they lack the service level agreements (SLAs) and uptime guarantees critical to running the business. Over time, however, it is likely that they will become more business-friendly. Google is the poster child in this regard, and this is likely one reason why Google stock recently closed at $638, even on a down market day.

LinkedIn is emerging as a prime source for high quality employee hires, without the flood of resumes generated by sites like Monster and Dice. Second Life is already offering business-related services, such as store fronts and office buildings. YouTube has a somewhat convoluted "Terms of Use" specification that prohibits many commercial uses, but has significant commercial potential that likely won't remain untapped forever.

It would certainly make sense to have a central site for product demos, sales presentations, and other business assets commonly hosted on private sites, and YouTube as a hosting platform could fill that bill.


A new role is emerging for IT executives, the role of technology consultant to the business. Part of this new responsibility includes a deep understanding of the arsenal of technology that is available in the "technology toolbox" to help the business achieve its goals. This knowledge can be used to craft a bridge between intangible business goals and tangible business outcomes. Social networking sites, and the growing acceptance of such sites for both personal and business use, add another tool to the business service toolbox.

Julie Craig is a senior analyst with Boulder, Colo.-based Enterprise Management Associates, an industry research firm focused on IT management. Julie can reached at

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