Job opportunities are something that people are actively seeking on social networking sites, Facebook more than most. Companies that try to sell products or services through the same sites are likely to face a much cooler reception unless they either represent brands that site users are already enthusiastic about or provide useful functionality. On MySpace, that generally means audio or video, making it a popular marketing vehicle for music. On Facebook, it means an application that takes advantage of the site's XML APIs for sharing data or comparing users. Without an incentive for people to hit the "friend" button, a presence on a public social networking site is no different from a free and very limited Web host.
Rather than joining the big social networking sites, many enterprises are trying to compete with them. Though few respondents to our survey have yet added social networking to their Web sites, many of the startups pitching the technology have scored big name customers. The media industry is particularly well-represented among clients of companies like KickApps and Leverage Software, with newspapers and TV stations trying to find a way to keep their audiences interested. The panic is driven by surveys showing that people under 24 prefer user-generated content and connections with others over traditional media.
Other enterprises can also benefit from setting up social networks as a means to communicate with customers—and let customers communicate with one another. As with online forums, software vendors were early adopters because they need to build mindshare among developers and consultants. Education is another, aimed at both building alumni networks and diverting traffic from MySpace or Facebook. But other companies, including McDonalds and Lockheed-Martin, are also investing in the technology. The big question for enterprises wanting to follow them: Do we buy dedicated social networking technology or wait until it becomes a standard feature of Web servers and hosting services?
Social Networking Technology Startups |
Vendor |
Main Markets |
Product sold as |
Affinity Circles |
Education |
Service |
Awareness Networks (iUpload) |
Enterprise, intranet |
Service |
ConnectBeam |
Intranet |
Hardware |
Community Server |
Consumer, enterprise |
Software, service (free or paid) |
CompanyLoop |
Intranet |
Free service |
Curverider (Elgg) |
Enterprise, education |
Free software |
Inspire Health |
nonprofits |
Free service |
KickApps |
Enterprise, media industry |
Service |
Leverage Software |
Enterprise, intranet |
|
Ning |
Consumer, small business |
Free service |
Pluck |
Media industry |
Service |
Pringo Networks |
Media industry |
Software |
SelectMinds |
Enterprise, intranet |
Service |
Small World Labs |
Enterprise |
Software, service |
Spigit |
Intranet, consumer |
Software, service |
Tacit |
Intranet |
Service |
VisiblePath |
Intranet, extranet |
Service via partners |
Searching For A Business Case
As the table shows, startups differ widely in how they sell the technology, or in some cases, give it away. The majority have SaaS business models, but some sell software or appliances. Free services can seem attractive, but in most cases vendors retain ownership of the users' data, something that could threaten both trade secrets and customer privacy. This is a particular risk given the likely fate of at least some startups—privacy policies and contractual obligations don't always survive bankruptcy and liquidation.