Using the internet to keep in touch with an extended circle of friends, a practice known as social networking, is about to transform finance and business on a global scale.
Social networking came of age when Time magazine named Mark Zuckerberg, the 26-year-old founder of Facebook, "person of the year 2010". Mr Zuckerberg is not the youngest person to be Time's person of the year. That honour went to Charles Lindbergh in 1927 at the age of 25. Others who made the cover include the US President Barack Obama and Vladimir Putin when he was president of Russia.
But the choice of Mr Zuckerberg has baffled many Time readers. Running a social networking website is not the same as making the first flight across the Atlantic or running a superpower. While men such as Messrs Lindbergh, Obama and Putin are historical figures, Mr Zuckerberg runs a website that many believe could be short-lived. Despite its 500 million-user base, Facebook is vulnerable to the same sort of fickle shift in consumer tastes that enabled Facebook itself to win business from its social networking rival MySpace by making it easier for users to upload their photographs.
Whatever the fate of his company, however, Mr Zuckerberg may well be remembered as the father of social networking. If so, even he may be surprised at the extent to which social networking will influence not only people's social lives but also their professional existence. The world's financial markets are already being influenced by social networking sites where investors share market analysis, gossip and express opinions on the performance of particular stocks. Some analysts are now starting to take this kind of mass communication seriously.
"Sophisticated social networking analysis tools are being used in financial markets. As market scuttlebutt is broadcast through social networking platforms like Twitter, [market] sentiment analysis tools are translating this into indicators of market movement," said Adrian Drury, an Ovum analyst.
The Securities and Exchange Board of India (SEBI) has begun to use analytics software to examine financial debates on social networking sites such as Facebook. A growth in alleged market manipulation has created concern that unscrupulous traders might be using social networking to try to move the prices of certain stocks.
SEBI has issued a warning to potential stock market investors: "Be extra cautious while using information available from media sources such as websites/blogs/newspaper advertisements/SMSs/e-mails/."
However, there is a more interesting trend taking place aside from alleged attempts at market manipulation. There is huge potential for social networking sites to offer business users the same ease of communication as that delivered by services such as Facebook.
"In the enterprise, social networking tools are also being used to enhance collaboration, customer relationship management platforms and sales force management and analytics," said Mr Drury.
He added: "Consumer web applications are merging with IT for the workplace. SAP and Salesforce, for example, both have enterprise application strategies built around social networking functions that owe their heritage to Facebook."
Using Facebook to monitor market sentiment or keep in touch with colleagues at work might sound a little frivolous. But the history of digital technology is one of developments swiftly making their way from the consumer market to business use. The PC itself was first launched into the consumer market before becoming an everyday feature of office life. The same is true of the internet itself.
Social networking is about to walk the well-trodden path between the consumer technology market and the business space. Instead of pictures of purely social gatherings, work-related functions such as conferences and receptions are expected to feature prominently in the new business networking sites. Adding friends will become adding business contacts and making professional introductions. Personal profiles are also likely to become a feature of the new websites.
But there also growing fears that business networking may further blur the already paper-thin dividing line between work and leisure. Office staff all over the world are regularly admonished for using social networking on their PCs while they should be doing their work. Given the increasing number of hours people already spend on social networking sites, providing another social networking service more tailored to business use may tempt disproportionate use. Catching up with former colleagues or communicating with friends in similar professions may not be quite what corporations have in mind when developing business networking systems.
And, while gossiping can cause the loss of friends, gossiping about colleagues can lead to redundancy or even end in the courts. Companies thinking about introducing business networking sites should also develop staff training programmes to educate employees about appropriate online behaviour. The difficulty will be that so far no one has managed to write a definitive guide as to exactly what constitutes appropriate online behaviour.
Another hurdle will be security. Corporate intranets can be easy to hack into. Business networking sites filled with details about privileged business information and informal strategy discussions will make tempting targets. By their very nature, social networking sites are, to some extent, open. If people choose to add former colleagues or contacts from other organisations to their network, security could become a nightmare. While those developing the software may speak of tiered access, where parts of the site are restricted, this could become difficult to achieve in practice. According to some security analysts, it is virtually impossible to secure an open networking site against breaches.
However, many companies are likely to decide that business networking is something they need, despite the risks. At the moment, IT companies appear to be front-runners in business networking. That is only because they understand the benefits it can bring. As a communications tool, social networking has proved to be highly effective in the consumer market. For companies with staff spread across different geographies, business networking offers a way of keeping staff in constant touch with each other, even when out of the office.
