Social networking sites help companies boost productivity

Social networking is going corporate. The popular technology used by millions of people to share ideas and photos on MySpace, Facebook, LinkedIn and others is catching on at companies to improve productivity and communication among workers.

Private, internal social networks make sense as companies grapple with a slumping economy that has made travel cost-prohibitive even as workforces are spread out as never before, tech analysts say.

"Companies are asking, 'How can we make our workforce more productive?' " says Kevin Martin, an analyst at market researcher Aberdeen Group.

Corporations increasingly are "exploring and experimenting" in the use of social networks to improve business operations, says Gina Bianchini,CEO of Ning, a social-networking site for businesses and consumers. It makes revenue from Google AdSenseand premium services.

"There's been a definite shift the last two months," she says. "There is a genuine interest now rather than a casual curiosity before."

It is hard to find projections for the blossoming market, Martin and others say. Martin estimates hundreds of companies worldwide — including Saturn and Smart Car, for example — use internal social networks, compared with a fraction of that a year ago.

"The spread of the workforce has put a premium on tech tools that let people collaborate, learn and share info from different parts of the world," says Ross Mayfield, co-founder of business-software maker Socialtext. He cites studies that show 85% of all employees work on projects with colleagues in other offices.

The employee-only sites are an excellent format for large, geographically dispersed organizations to communicate internally and elicit ideas from workers, says Tom Beauchamp, chief information officer at Hot Topic, a retail chain of 690 stores for teens in all 50 states.

The chain is testing an internal site, powered by software from vendor Socialcast, that will let about 6,000 employees share data and create ideas when it launches later this year.

Cutting in-box clutter

Practically, corporate social networks also cut down on unnecessary e-mail and instant messages among co-workers, says Dan Nye, CEO of LinkedIn, a social network of more than 28 million people, most of them business professionals. Private social networks let "people choose what they want to read and discuss, based on their participation, without being intrusive and annoying," he says.

LinkedIn's new service, Company Groups, digitally gathers into a single, private Web forum all of a company's employees. There, they can talk to one another, share ideas and ask company-related questions. So far, 1,000 companies have signed up for the service.

LinkedIn plans to generate revenue from the service through job listings, premium subscriptions and advertising.

Model N, a maker of business-efficiency software, uses the service so about 160 employees in North America, Europe and India can communicate and share market research reports, says Kamal Ahluwalia, vice president of corporate marketing at Model N. It also uses a Facebook service that lets people who share company e-mail addresses join the same group.

"It represents our culture very clearly," says Dave Allen, director of insights and digital media at Nemo Design, a marketing company in Portland, Ore., whose clients include Nike and Hewlett-Packard. It uses a private network from vendor Ning to connect all of its 60 employees in Oregon.

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