Social Networking in the Business World

While social networking has gone on almost as long as societies themselves have existed, the unparalleled potential of the Internet to promote such connections is only now being fully recognized and exploited, through Web-based groups established for that purpose. What is social networking? Social networking is the practice of expanding the number of one's business and/or social contacts by making connections through individuals.

It all started with BBS, Bulletin Board System, which gained popularity though the 80s and into the early 90s that were online meeting places which allowed users to communicate with a  central system where they could download files or games and post messages to other users. Compuserve and the ever popular AOL followed which let members in the AOL "community" create profiles and list details about themselves which was one of the service's most forward thinking features. Between 2003-2004 came three extremely popular networking sites: LinkedIn, Myspace, & Facebook. LinkedIn was a more sophisticated approach and allowed business people to connect with other professionals. Myspace and Facebook took off and were targeted more toward teens and college students but have been rapidly expanding to people of all ages as well as internationally. The United States, China, and Germany are the top three country with the most unique visitors for social networking sites and have growth rates from 23%-47%.

In 2010, the marketing expenditures for social networking were about $2 billion; however, by 2015 the budget is expected to increase to an astonishing $24 billion.  Advertisements on Facebook allow companies to specifically target consumers based on their interests, activities, as well as their school or location. If a user "likes" something on Facebook, the company can track other online interactions. There is also a ton of free publicity especially through the site, Twitter. Different tweets can stimulate consumers interest in products and allow them to follow them specifically and keep customers up to date.  Additionally, you can form Twitter endorsement deals for example, Kim Kardashian receives $10,000/tweet when she tweets about which products or services she uses to create buzz. Since everyone these days are constantly on these social media sites, it is a great way for companies to also deal with public concerns, informing customers of new product launches, and build customer trust.