Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Can Web 2.0 Evolve Into an Enterprise Technology?: Page 5 of 11

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.