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Networking   |  September 7, 2007  

Your next big prospect is at LinkedIn or Facebook

By Danny Bradbury

You’ve probably never heard of Ken Watanabe, and you almost certainly don’t know what he has in common with Kevin Bacon. Watanabe is a Japanese actor, and he mostly plays samurai. That’s why he was in The Last Samurai, which also features Tom Cruise. Tom Cruise starred with Bacon in The Color of Money. Movie geeks love this sort of thing. They play Six Degrees of Kevin Bacon, in which they see how many steps it takes to link a chosen actor with Bacon through other actors with whom he has worked. Watanabe has a Bacon factor of two.

Computer geeks prefer to do this type of thing with computers, and that’s where social networking software was born. It takes the Bacon game and applies it to the rest of us. If you register on a social networking site like LinkedIn and join a couple of friends to your network, you can then search for, say, me. The software will churn through its database of members to see how many degrees of separation we are from each other. If we’re not too far away from each other, well…it’s a small world.

Social networking software started in the late nineties with the now-defunct Six Degrees of Kevin Bacon. The idea quickly evolved into application-specific sites like Friendster, designed to help users find friends, acquaintances or a date. Consumers devoured the concept and then MySpace exploded onto the scene.

Today these sites eat bandwidth and employee time. Why shuffle paper on a desk when you can goof around on student networking sites like Facebook instead? This was the Ontario government’s rationale when it decided to ban the site outright. “We noticed the usage going up,” said Gerry Phillips, a spokesperson for Ontario’s Minister of Government Services. “People inside the Ministry decided it was more of a social tool than a business one. So the decision we made on Facebook was not to have it available.”

Others would disagree. Facebook originally started in 2005 as a way for students and alumni to network with their friends. They could post profiles of themselves alongside pictures and movies, and write on each others’ “wall”—a virtual note board. And while it is not primarily a business tool, professionals are beginning to adopt it as an ad hoc networking tool.

Career links
Other tools, such as LinkedIn, were business-focused from the start. Alec Saunders, CEO of Ottawa-based technology firm Iotum, has been using these tools for years. Facebook focuses on finding people already in your address book and keeping up to date with them, and features applications such as imported blog entries, music recommendations (using third-party plugins) and status updates so that you can tell what your friends are doing. In contrast, LinkedIn focuses heavily on finding new contacts by being referred through your existing network of business associates.

“I was looking for an effective way to do business development, gain introductions and so on. I understand that cold calling can be effective but it’s not necessarily going to get you the same response as an introduction from a third party,” Saunders said. He now has more than 1,600 contacts in his immediate LinkedIn network. “I use it for contacting venture capitalists and potential business partners.”

Like other social networking sites, LinkedIn’s fundamental value lies in its network. The network effect on which much Web 2.0 theory is built suggests that the value of the network is the square of the number of nodes (and, in this case, each member is a node). “Social networks typify this. You want to be in a social network where you find people,” said Alessandro Acquisti, assistant professor of information technology and public policy in the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University. Acquisti studies social networks and privacy. “Some networks grow slowly for a long time before reaching a tipping point, after which there is a perception that it’s the network where everyone wants to be. It becomes a self-fulfilling prophecy.”

With 12 million members, LinkedIn is rapidly becoming the 500-pound gorilla in the business-only social networking market, but the network alone won’t make money, said Allen Blue, LinkedIn vice-president of product strategy. “Once you have the network you can begin building revenue-bearing value on it,” he said. For LinkedIn, that revenue-generating capability rests in applications such as Jobs & Hiring, where recruiters can advertise jobs and source references through their contacts.

Already, newcomers are vying for attention. Visible Path is currently trying to grow its network to provide the underlying value, while selling its revenue-generating application to corporations. Its proprietary algorithms mine data such as e-mail, meeting requests and task assignments from other corporate systems to guess the strength of individual relationships within a company. It then marries this private company data with the relationship data in its public online network to determine the path of least resistance between, say, a sales executive and a target.

Companies using Visual Path are looking for the strongest possible relationship to broker a deal,” said the firm’s president Antony Brydon, typing a company name into a browser-based form and retrieving a list of people with bars next to their names. The bars determine the strength of the relationship, he said. “We’re using the algorithms to calculate path strength and determine how likely it is that I’ll reach that individual.”

The paths are also ranked by percentages. In his demonstration, the person at the top of the sorted list is supposedly 21 times more likely to get you to your target than the person at the bottom.

In spite of this somewhat spooky mathematical approach to quantifying human relationships, ROI figures for business networking tend to be thin on the ground. “These things are really quite new, so there’s not a great track record for applicability in business,” said Kevin Werbach, a professor at the University of Pennsylvania’s Wharton School. “The number of case studies for companies actively trying to use these services is quite small.”

Results are also difficult to quantify because most social networking services aren’t deployed in companies in a systematic way. Like Skype, instant messaging and the current spate of Web 2.0 applications, social networking has found its way into businesses from the bottom up, with individuals using them under the radar of both the IT department and the CEO.

Personal danger
This phenomenon, commonly referred to by analysts as the “consumerization” of IT, could carry dangers for both individuals and companies when the services involved deal heavily with personal identities. “What this software does badly so far is treat everyone indistinguishably as a friend,” said Barry Wellman, a professor at the University of Toronto and director of Netlab, a scholarly network that studies social networks. “People have different roles. The stuff I reveal to you might be different than the stuff I reveal to my wife. There’s no way for these sites to control that.”

Facebook has some limiting functionality, letting people block others from seeing their network of friends completely. But this isn’t granular enough, said Saunders, who suggests using the same tagging technologies as sites like Flickr and to classify contacts.

As the CEO of a company, you may want to include some customers, some suppliers and perhaps even some competitors in your network, but you may not want people in these three categories to see each other. Such delineations will come in the future, said LinkedIn’s Blue, admitting that they aren’t there yet.

The other danger of a consumer-focused technology that bleeds into the business environment is that it may come back to bite members later on. A student might think it’s funny to post photos of him and his friends doing drugs at a party, but three years later a recruiter checking out his profile may find it less amusing. And even if he’s smart enough not to post such material, there’s nothing to stop friends joking about it on his Internet wall.

“We can cluster Facebook users into groups. There is a group that is skilled and well aware of the catalysis of the network, and how visible they are,” said Acquisti, who added that such networks have to be easy to enter and get information from if they are to grow and succeed. “There is another group, which is a significant portion of users, who are clueless about the boundaries of the network.”

These people—who are happy to let complete strangers know many of their personal details including date of birth, location and network of friends—are actually jeopardizing their privacy, especially if they divulge information on multiple networks, allowing snoopers to assemble a fairly comprehensive profile.

But perhaps CEOs should be the most worried by these networks. LinkedIn allows members to contact others outside of their immediate network, either through a contact or directly. If an individual can see a person’s name and where he/she works (along with a profile that amounts to a CV), it becomes a simple matter to call the company switchboard and offer that person a job without going through the network at all.

These sites will either provoke organizations to ban them (as the Ontario government did) or to simply accept the transparent nature of the modern Internet, keep their firewalls open and concentrate on keeping staff happy. “LinkedIn is bad at removing happy employees (via better job offers),” Blue said.

Whether you try to introduce yourself to someone in your social network via a mutual contact or just call that person directly, success will depend largely on what you have to offer and on your reputation. This notion, called social capital, leads to interesting possibilities online, such as the accumulation of credits when you pass a message from one individual to another.

This is still only a vague idea in the boardrooms of most social networking companies. In the meantime, they have enough work overcoming the challenges of network growth and learning how to codify complex human relationships in meaningful ways.

Katsumoto, Ken Watanabe’s character in The Last Samurai, summed it up well with one quote: “I have introduced myself. You have introduced yourself. This is a very good conversation.”


Social Networking Sites 
News Corp.-owned MySpace is a consumer -based site with a strong teen and twenty-something base, which makes it a potentially useful promotional tool for businesses trying to reach a young audience.
Originally restricted to students, Facebook has opened itself up to all comers. Your profile lets you add movies, videos, blog posts and other personal details through plug-in applications. Members can also join special-interest networks and groups, and a microblogging feature lets you update people on your status.
Facebook’s stuffy 40-year-old uncle. Register your profile, see your network and your extended network, and get recommendations from your contacts to increase your status. Reach potential contacts by asking others to introduce you, or pay for a premium account that lets you send InMail or OpenLink messages. Use the paid job posting feature to find candidates with information about mutual contacts that you can use for references.
Similar to LinkedIn, Xing lets you register your profile, find new contacts through your existing contacts and participate in online forums.
A career network that lets employers advertise for referrals using their own private network, and also searches a publicly available database of jobs to provide complementary results.
Blending both a public network of professionals and information from privately maintained corporate networks, this service lets you find the shortest, most viable connection between you and a target executive. Its creators emphasize its use as a sales tool.
Recently relaunched in its third version, Plaxo focuses on your immediate network of contacts rather than looking for friends of friends. Registered users can keep each other up to date as contact details change, and can also post details of Flickr photos and Amazon address books.

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