Thursday, 20th January 2011
Tim Buckley Owen
As both Hoover's and Experian announce new social media related initiatives, the march of social networking into business continues unabated. But should other new developments with perhaps less obvious benefits be starting to ring alarm bells?
Hoover's has signed an agreement to integrate elements of LinkedIn's functionality into its online business information platform. LinkedIn has been identified as the most effective social media outlet for business-to-business customer acquisition, Hoover's claims, and this new arrangement will enable its users to leverage their existing connections within Hoover's workflow solutions.
Experian, meanwhile, has acquired a majority stake in Techlightenment, which provides tools to enable companies to market and advertise effectively using social media.
Although Experian's roots were in credit reporting, this move furthers its strategy of growing its digital marketing activities by extending its social media capability. Both developments seem like sound moves, considering the ever greater influence of social media on business development. But a recent podcast from financial consultancy Deloitte sounds a more cautious note about social networking's future potential. There could be more than a billion social network users in 2011, and social media are likely to deliver some two trillion advertisements. Yet their advertising revenues will amount to only $4 per person - less than 1% of the global industry total - and it's still difficult to extract useful insights from the volumes of user data that social networks generate (podcast available at http://digbig.com/5bdfse or go to http://digbig.com/5bdfsf for a helpful summary from paidContent:UK).
Consequently, social networks' long term market value will continue to polarise opinions, Deloitte suggests - a view supported by the Economist, which is distinctly sceptical about the value that Facebook's privileged private investors currently seem to be putting on the company.
What's more, Facebook has been in the news recently for quite a few of the wrong reasons - not just a possible Securities & Exchange Commission investigation of its fundraising activities. In a move that the Register newsletter describes as "creepy as hell", Facebook has apparently added application programming interfaces to allow developers to capture users' home addresses and mobile numbers - only to temporarily disable the feature three days later following concerns expressed by security firms.
However laid back personal users may be about this, it's unlikely to endear Facebook to business subscribers. Which may partly explain why the blogosphere has become so exercised recently over BranchOut, the service that enables you to create a professional profile on Facebook (http://branchout.com), vacuuming up your LinkedIn profile in the process. Veteran blogger John Blossom remains "a little uncomfortable" with the service, although he does concede that "so far it seems benign enough" (http://digbig.com/5bdfsm). We'll have to wait and see if it remains that way.
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