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Social Networking Extends Collaboration    [Date Added : 12/15/2003 ]
Social networking is now on the corporate radar screens. It appears to be the 'next big thing' on the Internet. According to those who follow trends, if you haven't heard of Friendster, Tickle or Tribe Networks, you're out of touch with the Net generation. And if you don't know about LinkedIn or Spoke, you're not maximizing the Net's ability to improve business relationships.

And, there appears that money can be made from social network. In October 2003, Friendster raised US $13 million from Silicon Valley venture capital icons John Doerr (of Kleiner Perkins Caulfield & Byers) and Bob Kagle (of Benchmark Capital). Investments in LinkedIn ($ 4.7 million) and Spoke ($11.7 million) followed quickly. The Washington Post and Knight Ridder have joined a $6.3 million financing of Tribe Networks.

Social networking is based, in part, on the concept of 'six degrees of separation.’ The science behind this pop-culture phrase dates back to 1967, when Harvard psychologist Stanley Milgram asked volunteers to forward letters via acquaintances to a stockbroker whom he identified only by name, job and general location. Instead of meandering indefinitely, a typical letter reached its destination in a mere, and surprisingly manageable, six steps.

Since then, network analysis techniques, powerful computers and the Internet have turned social networking from lifestyle curiosity into a phenomenon to be harnessed for fun, results - and profit. The theory includes some interesting insights. For example, weak social ties outside of a person's normal group are disproportionately important to functions like finding a job or new information. And though most people have few acquaintances, some special individuals called 'hubs' have many relationships.

The effects of social networks are all around us. Network analysis helped control last winter's SARS epidemic and is part of the Pentagon's anti-terrorism technology arsenal. Beyond such esoteric pursuits, social networking is becoming commonplace in both consumer and business-to-business applications.

With 4 million member accounts, Friendster is the leading and archetypal consumer social network. It presents as a way to meet people and get dates. A person signs up, types in a personal profile, and invites his/her friends to do the same. Then they invite their friends, who invite theirs, and soon you connect and cross-connect to an ever-expanding social network. One Friendster member reportedly has 278 friends who link her to 1.1 million others. Friendster is big in Canadian universities. It's hot in Asia and among US sub-cultures.

While the Friendster's site has no income today, Mr. Kagle and his partners are hard at work dreaming up business models, like charging merchants for referrals when users recommend good buys to one another. Meanwhile he hopes "network effects" a la eBay will keep the competition at bay.

Tribe Networks' business model is more direct. The site is a hybrid between social networks and classified ads. Looking for used furniture? Tribe will transfer you to someone you can trust via the branches of your extended social network - and it takes a proportion of the price paid. Its newspaper investors see Tribe as a new way to make money from classified ads.

Spoke's positioning is around business-oriented social networks. Rather than acquire them one contact at a time, Spoke assembles extended networks in one fell swoop. The user agrees to let it mine his/her address book or e-mail files, collects the connections, loads and matches them to the rest of its database. The goal, rather than making friends or buying consumer goods, is to let the individual mine the knowledge of the extended network to perform business tasks.

Spoke's marketing focuses on how it can help salespeople be more productive and avoid cold calls, but it can be a much broader knowledge management tool. It could also be valuable for headhunters and job seekers.

Social networks are making people rethink the architectures of social and business relationships. And they will certainly evolve in as yet unpredictable ways. In the mid-1990s, an individual needed to personally use the Internet to find out what it was really all about. The same applies to social networking. Check out some of these sites for yourself and imagine how they may change your life.

(Extract of an article by David Ticoll. Copyright 2003 Globe and Mail).
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