Page last updated at 07:01 GMT, Friday, 11 July 2008 08:01 UK

Firms 'miss' social site success

By Maggie Shiels
Technology reporter, BBC News, Silicon Valley

The Facebook logo is reflected in a human eye
Business are failing to tap into the potential of social networking sites

Businesses are missing out on the huge potential that social networks present, a leading information technology company has warned.

Researchers for Gartner found that huge opportunities for improving the management of large firms exist.

"Businesses which harness how employees use these sites stand to increase savings, productivity and profits," said Gartner researcher Jeffrey Mann.

He told the BBC the challenge was how to apply this to the corporate world.

The Gartner survey discovered that social networking sites, instant messaging email, chat and file sharing are attracting significant levels of interest online.

Their work was undertaken across 18 countries and territories between October and December of last year. It found that 38% of more than 4,000 PC and mobile phone users connect to sites like MySpace and Facebook via PCs.

Single people and teenagers and more men than women came top in terms of usage. The survey revealed that in large part they went online for entertainment purposes or to keep up with friends and family.

Throwing sheep

Mr Mann, Gartner's Vice President of research, said he understood why companies both large and small might be sceptical about believing social networking presents a viable business application.

Jeffrey Mann vp at Gartner research
The number of companies that see the value of social networking is small
Jeffrey Mann,
Gartner Research

"If you look at the first reaction from any business when they examine this, it's there is no reason to do this. People are "throwing sheep" at one another and they are seeing "who is hot".

"But you have to look deeper as to why these people are using these networks. It's to keep up with their friends, to mobilise them, to get involved in everything from politics to cleaning the local park. If you look at those reasons, then there are a lot of business counterparts."

When it comes to real dollars and cents, Mr Mann maintained there are simple things that businesses can do to reap the benefits.

"It can lead to better productivity if you can mobilise your people quickly through social networking.

"For example our press agency uses Twitter and FriendFeed to do things like find someone to talk to a reporter. With these networks you can find out who is online and get answers quickly. It's about keeping distributed groups in touch and up to date."

At a recent corporate executive summit in Gleneagles, Scotland, PR company Edelman revealed that social networking shaved 1% off its bottom line by encouraging its staff to use such websites as a recruitment tool.

UK CEO Robert Phillips said it was cheaper than using recruitment consultants and more beneficial at tracking down the right person.

"We get a better quality recruit. They are much more engaged with the firm and who the firm 'is'," he remarked.

Email replacement

Mr Mann noted that their work uncovered that in many cases social networking was actually taking the place of email, or at least taking a place alongside it.

"We see things that start in the consumer market eventually migrate to the business market. It used to take two or three years but now it's a matter of months.

"That is what is happening with email. It's not so much displacing it but replacing it in many instances.

"That's another reason why businesses should wake up to the value of social networking in a world where people are overwhelmed by the amount of traffic going through their email boxes. This is another way of keeping up with people," he said.

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