The business of social networking

Social networking should be bad for the hotel trade

Next month’s Gartner Symposium, to be held in the exclusive Mediterranean playground of Cannes, will explore corporate use of social networking. You could argue that is like meeting up to talk about the opportunity to eradicate the need to meet up in the future, but in a nicer place, with better weather and the chance to enjoy some decent food and wine on business expenses.

But Gartner is serious, and it is predicting that 60 per cent of Fortune 1000 companies will connect to or host a form of online community by 2010. Once you get beyond the headline-grabbing statistics, the key phrase here is “form of online community”, which may or may not resemble Facebook or MySpace, but which could well have something in common with LinkedIn.

Social networking is big business, or at least it is predicted to be in the future. Irrespective of whether Facebook, MySpace, Bebo et al can actually make the sort of money that eager financiers anticipate, the dizzying success of social networking sites to date has made a big impact on the business world.

Marketing executives now worry that their competition is getting better brand awareness by creating social networking profiles, for example. Sales staff are paranoid that deals are being made with rivals on social network sites behind their back. Even HR professionals agonise that potential candidates will go to other firms that make better use of Web 2.0 collaboration technology.

But what is the attraction? Photo and music sharing, contact lists, bulletin boards, classified adverts, email and instant messaging were all widely available from other web sites before.

The difference is that they are accessible at one site that works its socks off at fostering a sense of community among its visitors.

Certainly one of the best uses I have seen for a social networking site ­ which Gartner has also identified ­ is much like an extended customer support platform, basically just one more way for disgruntled users to sling mud at the manufacturer or supplier that sold the latest duff widget.

Another use would be to find more information about a product or service, although it is hard to explain why customers would want to visit a social networking site to find the same information that is on the company web site. The deciding factor could be that sense of user community, which means that other customer opinions can be sought and read at the same time, and people can swap notes about their own experiences.

Even so, the big draw of social networking from the corporate perspective remains the sheer number of people who use them. Web site monitoring resources such as Comscore now report that Facebook and MySpace regularly receive more than 120 million unique visitors per month.

Nevertheless, these numbers call for careful scrutiny. One recent estimate suggests that if these sites are being honest, there would be about 1.3 billion people worldwide using social networks ­ almost the entire internet population.

How many of these registered users are like me? I signed up to the site out of curiosity, discovered I had no friends (at least none that I wanted to contact) and never went back.

So when, if ever, will we know that the use of social networking has really taken off in the business world? Bearing in mind the questionable metrics of the digital world, maybe we should look for evidence of real-world signals, such as when the amount of business travel is vastly reduced. The point when airlines, taxi companies, hotels, restaurants and bars start going out of business in their droves might be as good a reference point as any.