In-House Social Networks

With a nod to Facebook, large companies now have the virtual equivalent of the water cooler on the Web

by Heather Green

Like many twentysomethings, the workers at Starcom MediaVest Group spend a portion of their workday on a social network. So in April, executives of the ad-buying firm figured, why fight it? They launched a network of their own, for employees only, called SMG Connected.

Today, a little more than a third of the company's workers, or 2,060 people, have signed up for their own pages where they can create profiles that outline their jobs, list the brands they admire (Nike (NKE )? Starbucks (SBUX )?), and describe their values by choosing from words such as "creativity"and "humor."

The service even winks at how people use MySpace.com (NWS) or Facebook to put themselves at the center of the universe: Search for someone—say, with digital experience in Mexico—and you show up as a pushpin in the center of a bull's eye, with surrounding pushpins representing people who fit the bill. Says Starcom Vice-President Pam Daniels: "Giving our employees a way to connect over the Internet around the globe made sense—because they're just doing it anyway."

Plenty of big, mainstream companies look at the fast-growing social network scene as a place to market their products. But many are also adopting the same Web technology to create internal networks. It turns out to be an efficient way to mine for in-house expertise, discover new recruits, and share information within their own walls. Setting up a corporate version of a social network has its own challenges, as well. Companies have to build in safeguards to ensure that they can track the discussions and document sharing, to be certain that employees comply with government regulations and don't tumble into legal hot water.

Corporations are being nudged along by employees, and not just the digital-savvy Generation Y that's now entering the workforce. More 30-plus employees are signing up with Facebook to trade daily updates with colleagues and friends. They're also building lists of contacts from among the 13 million professionals on LinkedIn. At Ernst & Young alone, 11,000 workers now have Facebook accounts.

That translates into a juicy new sales opportunity for tech companies that sell networking products. Everyone from IBM (IBM ) to Microsoft (MSFT ) and on down to startups like intro Net-works, Awareness Inc., and Jive Software, are offering applications and services. One company, SelectMinds, has created social networks for 60 companies, including Lockheed Martin and JPMorgan Chase.

And SharePoint, the Microsoft software that lets companies set up MySpace-like profiles, blogs, and collaborative Web sites known as wikis within the confines of their firewalls, is one of the fastest-growing server products in the company's history. "At first people were slow to adopt this; they were nervous. But now we're seeing a bunch of adoption," says Rob Curry, director of the Microsoft Office SharePoint Server software. Both Microsoft and IBM are using their own offices as labs for their products.

Executives have legitimate concerns about spending time and money on something that could be just the latest techno flavor of the week. Remember knowledge management software? That product, designed to handle a lot of the same tasks as today's corporate social networks, was one of the hot buzzwords of the late 1990s. But the systems proved overly complicated and demanded hours to transfer information into databases.

Blocked Access

Executives also worry about losing control of information or opening up their networks to security breaches. The whole "open" ethos of the social Net—sharing pictures and music and letting "friends" know your every activity—goes against the instincts of big-company chief information officers.