Social Networks Go Corporate

Chatting up colleagues at the watercooler is so...well...last century. The latest venue? Cyberspace.

By Michael Doan, Senior Associate Editor, The Kiplinger Letter

July 18, 2008

More and more employers are setting up internal social networking sites as a way for employers to weigh in on topics ranging from making the firm greener to news about their families. More and more, employees in far-flung locations and even outsiders are also using them for work projects that require collaboration.

These networks are patterned after the popular MySpace, Facebook and LinkedIn Web sites that first gained cachet with young people, but are now increasingly being used by professionals to establish and maintain personal contacts as well as business acquaintances.

Company-created sites ensure that the employer maintains control over proprietary information and vendor data, unlike employee-created sites that use LinkedIn, Facebook and other social networking firms. If a sales person leaves the company, for example, the firm still has access to the person's contacts stored on the Web site. Another advantage of a company-sponsored site: It reduces the chances of catching viruses acquired from outside networking sites.

LinkedIn and Microsoft see an emerging market for managing corporate social networks. Both firms are testing systems now and expect to have new products ready by end of this year. Microsoft is experimenting with a product called TownSquare among 8000 of its employees; it provides news feeds about the company and its employees as well as document collaboration software. LinkedIn is working on a product that will provide news of company interest, a question and answer forum and a searchable roster with employee backgrounds, interests and links to colleagues or friends that employees may have in common.

"We'll see how valuable it is to be able to bring connections we've collected over the years and make them available in a linked-in sort of way," says Allen Blue, LinkedIn cofounder.

Not everyone is convinced employees will warm to a company-sponsored network. "What are the privacy rights?" asks Marty Fahncke of FawnKey & Associates, a business consulting firm. "If you go to a social networking site and are part of the corporate culture, some of the fun and benefits are gone."

But Carrie Podber of Echain Communities, a builder of client relationships via online communities, says a company site is "a good way to get employees to interact with each other. Now if you take them to a business retreat, they have already built up relationships online." Of course, such networks will be only one piece of the communication puzzle, not the complete answer. “Anything we do online will never replace the offline eye contact, the handshake or any of that,” Podber says. “This is not meant to supplant it."

Why not just stick with e-mail or instant messaging? Social networks allow for more interaction than simple messaging back and forth. Workers can see a list of comments and add their own. Or get a feed of news of interest to their company or department. It's an easy way to post and track lists of birthdays, promotions parties, and much more. Moreover, pictures, sound and even videos on the page go a long way to providing a personal touch in a stiff business environment.

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