Social networking websites allow people to build up an online community by creating a profile containing key information, and then linking to others' profiles. Your profile page highlights your areas of interest and provides others with a means of contacting you.
With sites such as MySpace heading the list of the most popular places to visit on the web, it's clear that social networking sites are phenomenally popular at the moment, and businesses could be looking to online means to make new contacts and create new business leads.
According to data from Hitwise, social networking sites are rapidly growing in popularity among web users. Stats compiled in September found that one in 20 web visits are to social networking sites, almost double the number compared to a year earlier. Bebo, MySpace, Friendster and their ilk have already established a good foothold in the youth market, while Microsoft is also getting into the social networking arena, with its invitation-only Wallop site.
The Hitwise report also found that about 2.4 percent of visits to Shopping & Classifieds websites came via MySpace, while telecommunications, banks and financial institutions, and travel websites also benefited from MySpace traffic. With such a level of popularity among web users, businesses would be ill-advised to ignore the current trend.
In Ireland, social networking has been enthusiastically embraced by teens and young web users, but businesses have been a bit slower on the uptake. "It's in its relative infancy in this market," says Aileen O'Toole, managing director of internet consultancy firm Amas. "It has got wings in more web-mature markets."
Commercial profile
Social networking sites may, at first glance, seem like the domain of teenagers and twenty-somethings, who use them to keep in touch with friends and to make new ones. However, there are some obvious business applications for these sites, with commercial profiles for businesses, bands and TV shows increasingly showing up on MySpace. A number of business-focused networking sites have been established in order to tap into this market. Examples include ZeroDegrees.com, Ryze.com and LinkedIn.
O'Toole says that the idea of networking is not a new one; but until recently it has not been conducted on the web. For example, local Chambers of Commerce facilitate these types of communication between their clients at real-world events, seminars and meetings. Networking is all about sharing knowledge, experience and information. O'Toole explains that using social networking sites provides access to more high-quality sources of information. The business benefits that can be reaped include making new contacts and increasing opportunities for companies expanding into new markets.
LinkedIn is aimed squarely at professionals, and offers a multi-million-strong network to small firms and business people. Orly Kerden, marketing manager at LinkedIn, claims the site is the world's "largest and most effective business network".
"On LinkedIn, more than 9 million experienced professionals around the world representing 130 industries connect to get things done quickly," Kerden says.
"Service providers, for example, enjoy the benefits of promoting their services and receiving recommendations. Professionals rely on these trusted recommendations and referrals to get business done."
Making connections
Networking sites can provide a useful source of business information for small companies and entrepreneurs, opening them up to contact with experts and colleagues. "It's all about knowledge," says O'Toole. "It's a way of connecting with peers, understanding issues, getting ahead of trends."
LinkedIn, for example, offers additional services such as the LinkedIn Answers service, which allows users to ask business-related questions and get answers from their trusted network, as well as from experts on the topic.
Business leaders such as Toyota have already embraced the idea, with the carmaker setting up a social network for owners of Hybrid cars. Already it has registered almost 10,000 users and is using the site as a more subtle way to get information about its products across to customers.
Of course, one of the major advantages to building an online business network is that it can be done at any time and can fit in around busy work schedules, and the digital environment means that nowadays networking is more flexible and scaleable. Further, because they are not geographically limited, these sites can facilitate businesses in expanding into new markets overseas. "This is [traditionally] very difficult unless you have connections," says O'Toole. "It's all about making it simpler."
With such powerful tools at entrepreneurs' fingertips, the possibilities are endless. Building an online business network could prove to be a boost to a small firm without expending too much effort. "Networking is what makes the business world go round," says O'Toole. With the aid of technology, networking - the life-blood of small businesses - can be made that bit easier and more efficient.
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