4 April 2007

Social-networking sites have business uses too [The Economist]

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Social networking for business
The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree, writes The Economist.

“LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. […]

To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members—and of jobseekers and employers—may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. “Social networking sounds great in theory, but the business benefits are still unproven,” says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.”

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