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November 13, 2007

Why your company needs to be on Facebook & MySpace

by Charlene Li

(Note: this was originally posted on Harvard Business Online, which is part of Harvard Business School Press, the publisher of our upcoming book).

As an analyst, I’m often asked by people why they should bother with services like LinkedIn, Facebook, and MySpace, both from a personal as well as corporate perspective.

Let’s start with a fundamental premise – that all business is social and personal. Business involves people and communications and we all prize “networking” skills and opportunities. Businesses don’t strike deals with each other – people do. And we build bonds by talking about everything from sports teams and the weather to our families and hobbies.

So we as business people already engage in social networking every day, primarily through phone calls, emails, meetings, and events. The same activities take place on social networking sites – people share tidbits and moments that build relationships.

Yet, many people when they first go and experiment with a site like Facebook, don’t find it relevant to their professional lives. There are two reasons for this: 1) Your professional colleagues are likely not actively using Facebook; and 2) Most of the applications today aren’t designed for a business context.

Let’s take the first problem – you may not have many friends in these social networks. This was my problem – it was only this past spring that people I actually know started using Facebook. My friends are posting links, book reviews, the events they were going to, and suddenly, I now find myself at a near addiction with Facebook. I went to an event because five friends said they would be there. And when I saw them at the event, I congratulated them on closing a round of financing and asked about their recent vacation – all of which had been shared on Facebook. What’s the business value of staying on top of your network? As we know from experience, priceless.

Now for the second problem. Business applications on services like Facebook have yet to take off, which is why people like Tom Davenport have a hard time seeing the business value of social networking sites. I don’t blame him – after all, the most popular applications on Facebook today include such frivolous things like playing Scrabble and Vampires (where you “bite” your friends – don’t ask). That’s because these applications are being designed by 20-something developers for their 20-something friends.

But remember: The notion of creating social applications is only 6 months old – we are in the early days here. Business-oriented developers are just now waking up to the possibilities, and the audience that would use these tools are just discovering social networking. It’s going to take some time for these two sides to find each other and develop an ecosystem for business applications.

Here’s an example – LinkedIn described to me a new social application that would show events in your industry that are coming up – and who in your network is going to them. It will also show you people in that city that you could connect with. So if you know that colleagues, suppliers, partners, funders, customers, etc. are going to be gathering, you’re going to want to be there too.

There’s one final business value that companies are already seeing – and that’s reaching the people who are using social networking sites. Advertising on social networking sites won’t work well – but communicating with people, talking with the “fans” of your products on Facebook makes a lot of sense. Victoria’s Secret has badges that its enthusiasts can download on MySpace on put on their profiles for their friends to see. Ernst & Young (yes, an accounting firm!) answers questions from college students on Facebook – people they are trying hard to recruit.

So don’t write off social networking sites as merely social playgrounds for the young. Your customers, prospects, and employees are exploring and extending their relationships there. Some of you will be bolder in creating business value in these networks while others will wait for the pioneers to carve out the paths. But ignore these new communities only if you believe your customers are not there – and there are few instances where this will be the case.

Does your business embrace social networks? Or is it taking a hands-off approach?

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I completely agree with you. Recently I was struggling to convince my colleagues to join an online nursing community I was launching, and having no luck. Then, all of sudden, every nurse I know under the age of 27 decided to join Facebook, AND THEY USE IT CONSTANTLY.

It's only a matter of time before the Facebook phenomenon is completely ubiquitious in the same way that google is.

Graeme Thickins

Charlene, excellent post! I have the same experience as you, and also firmly believe businesses must embrace social networking.
I blogged about this topic last week in my coverage of the Defrag conference.


araç kiralama

very nice topic thank youu

David Deal

You can find the Avenue A | Razorfish Facebook page here: http://www.facebook.com/profile.php?id=5669564445

Shiv Singh

I couldn't agree more too. It is only a matter of time before businesses discover that the social networks influence purchasing decisions more than anything else. When that realization hits, there will be a rush to create Facebook pages and more broadly join the social media revolution. It is no more a case of one's friends not being on the social networks. They have the momentum now.

Glenn Gow

Charelene, I love your blog.

I see an opportunity for consumer-focused companies on social networking sites. I agree with your points about why this is important and participation is key.

To make this work for B2B companies, the social networks need to evolve to where people with similar business concerns are interested (and willing) to share those business concerns in a public forum.

These will evolve, but I’m not sure I see it happening anytime soon on MySpace, Facebook, or LinkedIn. What I’m looking forward to seeing is the evolution of social networks that are B2B oriented.

What are the ones you are seeing?

Account Deleted


Great points about how new this all is. In addition to "newness" I think that Facebook is still a bit "clunky" as a business app. LinkedIn seems to do a little better job from a feature standpoint for business use, but it's less fluid (due to it's attitude on third party developers). You are right that this is all evolving quickly but I'd be surprised if Facebook becomes the business networking tool of choice. I think it will be very good for folks to mix their personal and "business-casual" networks together though.

I wanted to point out that I think one of the most promising sub-segments for business social networking to take off in is trade and professional associations. After all, business networking IS their business model. Unfortunately, they appear to be slow to adopt and - since social media has lowered the barrier to entry so dramatically to their business - will soon find themselves on the defensive if they don't get their acts together. Already buzz is that the Association of the future is a "no-dues" business model. Must be scary to most of them!

ASAE & the Center for Association Leadership has gotten proactive in covering this space, but I don't think even they are moving fast enough. I'm going to be covering this space in my blog (current entry on Associations: http://m-2-m.typepad.com/m2m/2007/11/giving-others-t.html) and hope to see forward movement soon!

Kathryn Parsons

LinkedIn will never make it as long as they stay as restrictive as they are currently with inmail. It does me no good to have the account if I can't even (in)mail my own network when I want/need to.

Great point about trade organizations. They better get on the bandwagon or it will be leaving them behind. They could be using it to their targeted advantage if they were more progressive.

Shama Hyder

I would say that the social networking site you choose should match your platform. While facebook may work for a professional and a student...MySpace will not. Different crowds of people are part of different networks. It all boils down to knowing your target market and where they may hang out.

Shashi B

hi Charlene,

If the customers are not yet on Facebook they will be soon. Thats inevitable. SO businesses should have presnce to add FAcebook as another channel for people to reach them. This may one day be the most convenient chanlle for cudtomers.

Tom Powell

You are absolutely right on that Facebook/LinkedIn/Myspace will continue to grow in importance in the business world. For example, any company ignoring them will have far less exposure to younger business people.

As a Duke business school student, Facebook has been huge this year. The second years hardly use it at all, but now just about the entire first year class is on facebook and we use it for purposes both school activity related and social.

I look forward to the day when I can maintain just one profile (instead of 3) and simply allow different users to view different aspects of myself. How about a linked in/facebook merger? Or far greater integration via OpenSocial, perhaps? After which we would be able to tag our contacts as friends, family, coworkers, etc. which would restrict which content they could see.


Not only good but also a logical and analytical article.
- By the way, your articles did a great job for my master thesis, so thanks :)

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