Social-Networking Vendors Set Their Sights on the Enterprise

By Shelley Solheim  |  Posted 2004-03-19

Social-Networking Vendors Set Their Sights on the Enterprise

If youre like most IT professionals, when you hear the word "network" youre likely to picture a web of computers or looming security threats—certainly not your social circle. But a panel of experts gathered in New York this week to dispel that perception and instead talk about the importance of social networks in the enterprise.

The panelists, all founders of social-networking start-ups, claim their technology—popular in online dating and Web sites such as—also can help businesses boost the bottom line.

"Relationships are undoubtedly one of the most valuable and least-visible parts of a business," said panelist Antony Bryden, president of startup Visible Path Corp. "The goal is figuring out how and where these relationships can be applied to business problems."

New York-based Visible Paths software mines employee e-mail and IM accounts, calendars, and address books for contacts. It then analyzes and maps the networks of relationships revealed within those resources. The goal: to help enterprise salespeople tap into their colleagues connections.

"The department that feels the greatest pain from lack of visibility into relationships is sales," Bryden said. But, he added, human resources departments also can use the technology to scope out candidates.

Visible Path also weighs the strength of the connection. If there are multiple connections, the software suggests the strongest one. The tool gauges relationship strength by analyzing such factors as degree of connection as well as consistency, frequency and length of communications. In addition, the system can identify which employees in the past have provided connections that have closed deals. Bryden says this type of analysis is essential for any social-networking tool. "Any solution that doesnt have weighting is going to drown as networks become more saturated," he said.

Bryden acknowledges that privacy is a concern. "For this to become widespread, a company has to deliver the highest standard of privacy," he said.

Visible Paths software gives each individual "total control over his or her relationships," he said. For example, users can choose to omit contacts from Visible Paths system at any time. They also can anonymously deny requests for connections or ask for more information before deciding. Bryden said it would be very difficult to identify a person who wont reveal a contact because "these networks get very complex, very quickly."

As part of its enterprise push, Visible Path offers integration with standard applications such as Microsoft Corp. Outlook and IBM Lotus Notes, as well as CRM (customer relationship management) systems. Visible Path partners with sales force automation vendor and plans to announce similar partnerships with the launch of its product in the first half of this year.

Visible Path has been beta testing its technology for the past six months in midsized companies.

Next page: One saleswomans experience using Visible Path to mine for contact gold.

Mining for contact gold

One saleswoman who has been using the software for two months said it has streamlined her sales process. "Its been very effective in identifying colleague relationships, friends and neighbors," said the saleswoman, who requested anonymity. "This was happening before, of course, but this is just making it easier. It was all manual before. Now you can do it off your desktop."

Her company, which offers hosted applications for financial services firms, uses as a CRM system. With Visible Path, "I can just click on a name in Salesforce, and it will ask me if I want Visible Path for that person, and it will automatically search," she said.

Since she started testing Visible Path two months ago, she has made about a dozen Visible Path-assisted phone calls and has seen the companys network of potential contacts grow. Based on 90 employees in the network, she said there are now 750 people within one degree of separation from her, 25,000 within two degrees and 75,000 within three degrees.

Another approach to social networking is from ZeroDegrees Inc. Mark Jeffrey, vice president of the Santa Monica, Calif., startup and a member of the panel, said that he thinks business networking should begin with the individual.

"Relationships belong to individuals," Jeffrey said. "If a company dictates to me that I have to hand over my contacts, that doesnt make me comfortable."

Next page: ZeroDegrees hooks up with Microsoft Outlook to give insider advice on adding network members.

ZeroDegrees offers contact advice

ZeroDegrees, which this month was acquired by IAC/InterActiveCorp, offers a hosted service where users can create their own business networks. There are now some 280,000 users in the network, Jeffrey said.

ZeroDegrees offers integration with Microsofts Outlook e-mail client. The software can scan a users Outlook account and make recommendations about which users should be added to the network. ZeroDegrees can import data from other e-mail clients as well.

Jeffrey said one feature thats becoming increasingly popular is the Inner Circle option, which allows users to create a restricted level for people with whom a user would "share [a] Rolodex." Those in the Inner Circle can contact each other freely, while other users have to request an introduction.

ZeroDegrees plans to ramp up its network in the next four months, with new sales-intelligence features and richer integration with other contact managers, Jeffrey said.

He acknowledged that there is a limit to using social-networking technologies for business. "Salespeople are mavericks, gunslingers; theres no way theyll let people get hold of their contacts," he said.

Next page: Its nice, but how do you make money off it?

Social networkings revenue plans

Although few attendees at the social-networking event disputed the usefulness of social networking, some questioned how these companies will bring in revenues. ZeroDegrees, which currently does not charge users, eventually plans to sell subscriptions for $10 to $20 per month per user, Jeffrey said. Organizations also can buy blocks of subscriptions, he added.

Another panelist, Adrian Scott, CEO of Ryze Ltd., said his site brings in revenue through three streams: subscriptions that offer advanced search capabilities and privacy levels for $9.95 per month; classified feature ads, which cost $9.95 per month; and networking events. Ryze, which Scott launched in the summer of 2001, has been profitable for about a year now, he said.

Visible Path plans to offer its software as a service, charging companies platform-licensing fees that start at $20,000 per year and scale up depending on the number of seats. A 1,000-person company, for example, would pay $100,000 a year.

"In enterprise tech, this is clearly going to be ubiquitous," Bryden said. "The question is, Who will deliver the technology, and how will they deliver it?"

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