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• Does the New Form of Social Networking Matter to You?

  By Burkey Belser, Nanther Thangarajah and Pete Rutkowski

  Posted on October 15, 2007 at 5:02 pm

  
  
  

  You will learn:
  1. Why should you care about social networking sites
  2. Why you should ignore some social networking sites
  3. How those sites work
  4. Their significance for your marketing and recruiting efforts

  In our work across the professional services landscape, we hear the following client refrain on a daily basis: “Ours is a relationship business.” And so it goes that we also hear: “Who you know often matters as much as what.” Driving home this point, a recent New York Times article and accompanying graphic illustrates the interconnected and small world of Wall Street investment bankers, lawyers, hedge fund managers and private equity firms. It also diagrams the college ties that bind them.

  These types of social networks are ageless. But the concept of online social networking is all the current rage—in part, because it’s very big business. So we asked ourselves, what effect, if any, will social networking sites have on the professional services (or relationship) business? With this question as a guide, we look this month at three of the most popular social networking sites and offer some insights about their implications for your marketing and recruiting efforts.

  In your space: MySpace

  If you, like many people who were born before the 1980s, wonder why you should care about MySpace, you only need to take a look at its brief history. Started in August 2003 to compete with Friendster, MySpace had the heavy financial backing necessary to become the third most popular Web site in the U.S. Just let that fact sink in for a moment… the third most popular Web site in the U.S.… in less than 4 years.

  The numbers are staggering: every day 230,000 new accounts are created. Currently MySpace has over 200 million people signed up—compare that to the current population of the U.S., which is roughly 300 million. If you are in the business of recruiting talented college graduates, chances are that they’re on MySpace. If you or your organizations don’t have a presence on MySpace, you are missing out on a valuable free resource you can use to make connections and recruit new employees.

  The features of MySpace are not unique. There are several other social networking Web sites that offer the opportunity for people to sign up, post photos/videos/blogs and connect with other people with similar interests. MySpace simply has the inertia of millions of users that propel the juggernaut along. The more people join, the easier it is to find and make friends/contacts and increase the size of the social network. Many of the early adopters of MySpace were local bands that used their MySpace pages to post information about upcoming shows, plus photos and MP3s for download. It was an easy and free way for musicians to grow their fan base.

  So how can you leverage MySpace to help your organization?
  Company MySpace pages can be used to promote the organization and provide a casual counterpoint to the corporate Web site. A MySpace site gives recent grads the ability to read about the organization in a setting that is not geared toward clients.

  In addition, more and more HR departments are using MySpace as a research tool in evaluating potential employees. Check the numbers: 15% of recruiters use social networking sites to screen candidates and 60% (of the 15%, or 9%) said that the information they’d obtained had an influence on their hiring decision. One thing to keep in mind—most students do not intend to have their MySpace profile as part of their application. The silliness they express in their ‘private’ MySpace profile should not automatically count them out as prospective hires but, hello kids, get a grip! If candidates talk about past criminal activity on their profile page, they should not be surprised to find themselves passed over.

  What are the pitfalls?
  For every great idea on the Internet, there is a scam trying to take advantage of it, and MySpace is no different. Not all profiles on MySpace are completely truthful, and some are just blatantly false. Search for George Bush on MySpace and you’ll see that he has over 20 profile pages. Some of you may be able to imagine the President signing up for a page, but probably not 20 times. So when you research candidates and read their profile, recognize that the postings might not be entirely true.
  

  Facing up to Facebook

  What started out as a networking site for high-schoolers and the college set is now open to everyone. Calling itself a “social utility” with 45 million active members, it has the largest number of registered users among college-focused sites and is in the Top 10 most trafficked sites.

  Facebook offers features similar to other social networking sites but also invents on the category. Yes, you can set up a profile, share pictures and generally keep in touch with your friends (or “poke” them), but the real inventiveness of Facebook lies in its extensibility. One can add features and functions to their Facebook page using any number of available “applications.” These applications can range from the useful (events pages from upcoming.org) to the whimsical (a virtual food fight—a clue to Facebook’s original target audience).

  Facebook encourages third party development. Therefore, it’s relatively easy to develop new programs that take advantage of all the Web 2.0 goodness and the warm&fuzzy that comes with keeping in touch online. Additionally, RSS is everywhere in Facebook, so you can keep track of everything from new notifications and alerts to profile updates.

  So can you leverage Facebook? For starters, as part of recruiting efforts, having your firm’s associates maintain Facebook profiles will provide one more way for prospects to gain insight, informally, to the firm’s culture and people. It’s also one more method of connecting with the connected by maintaining contacts that share connections; for example, alums that work at your firm can connect with prospects working in other businesses.

  Because Facebook allows you to develop applications for the network, you can go one step further, if you’re so inclined. For example, you might be able to develop an application that automatically embeds your recruiting videos and testimonials on a Facebook page. Innovations like these cannot help but increase your firm’s visibility.

  But be cautious. Security concerns are foremost. Facebook isn’t inherently an insecure site, but extensibility and open development come with the risk that pirates can hijack personal data. To date, this concern is more yellow flag than red, but be warned.

  Linking in to LinkedIn

  Wikipedia (not Britannica, you’ll notice) tells us that “LinkedIn is a business-oriented social networking site, mainly used for professional networking. As of September 2007, it had more than 1.4 million registered users, spanning 150 industries and more than 400 economic regions (as classified by the service).”

  LinkedIn’s former CEO Reid Hoffman was an Executive Vice President of PayPal and remains as President of Product and Chairman of the Board. Like the other social networking sites, LinkedIn is funded by serious money, in this case by Greylock, Sequoia Capital, Bessemer Venture Partners and the European Founders Fund.

  LinkedIn grows one link at a time. The goal is to build a trusted network where registered users maintain a list of contacts with their detailed resumes. The people on the list are called “Connections.” Users can invite anyone (whether a LinkedIn user or not) to become a connection. Whether a first, second or third degree connection, the individual is vouched for by someone. You might, for example, wish to gain an introduction to someone you wish to know through a mutual, trusted contact to find jobs, people and/or business.

  Employers can list jobs and search for potential candidates. Job seekers can review the profile of hiring managers and discover which of their existing contacts can introduce them. You can search for colleagues from past employment or reconnect with college chums. You can also search service providers, although the search is not organized by geography and, therefore, may prove to be relatively useless.

  There are some basic features of LinkedIn you’ll probably want to know. Most important, the profile you edit and nurture is not the profile others see. That’s characteristic of all social networking sites, but it’s a little disconcerting to the newbies trying to find their way around LinkedIn. You can view the profile others see—and you should, in order to modify your entry.

  Some companies, notably IBM, use LinkedIn in an organized, systematic way. Individual employees post professional resumes and seem to go to the trouble to complete their links. We do believe LinkedIn could become a valuable resource for young folks developing a reputation or a business. But the site is so poorly designed and requires so much effort on the part of the user that we can’t imagine its long-term success is assured.

  In closing

  It’s interesting and instructive that social networking sites like FaceBook were born on campus, not unlike the old school Wall Street deal maker network. But the new form of online social networking is not just for the next generation of professionals. As one reporter describes it: “Online sites, like LinkedIn, are specifically tailored to facilitate communication and referrals for professional purposes. You submit your contacts, invite friends and colleagues to be part of an “inner circle” of business or personal associates, then use the system to seek “friends of friends” or business contacts of your associates. Soon, this inner circle of contacts expands as individuals are contacted directly or as introductions are made by mutual friends and associates.”

  Sounds like classic business development to us. See you online.

  Tags:

  Facebook, LinkedIn, MySpace, Social Networking, Web 2.0 

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