Social networking offers a new path to connect with people, and those people can be friends, business partners, and customers. Though Facebook and MySpace dominate the social networking space and some businesses are making money on both, neither is a true business tool. However, other social networks do have business application. For instance, LinkedIn and Ryze focus on building professional networks for individuals to advance their careers, Biznik concentrates on localized business networks, and Sales Spider is dedicated to small and midsize businesses. Recently, bMighty chatted with Russell Rothstein, CEO and founder of Sales Spider, and learned his perspective on the future of social networking and the opportunities he sees for smaller businesses.
bMighty: Right now, there's buzz about social networking. Mark Zuckerberg, the Facebook founder, is everywhere from the Forbes list to 60 Minutes to SXSW. Not long ago, MySpace was white hot, and once upon a time Friendster was the cat's meow. Is this a fleeting fad with the clock counting down on 15 minutes for each of these new sites, or does social networking have staying power?
Russell Rothstein: Pure social networking sites are limited; they function as directories like the yellow or white pages. It's not enough to just connect people to one another. To succeed, providers need to add value to social networking so there's a reason to be there after you connect or reconnect with the people you know. On their own, connections aren't reason enough to keep visiting a social network; there's a saturation point. That's why Facebook opened its API and Google launched OpenSocial. Those changes are about adding value and giving members reasons to return, and that's the future of social networking.
bMighty: On the maturity index, where does social networking stand right now?
Rothstein: Social networking is just in its infancy, like e-mail before we could integrate it with our address books. In North America, we'll reach the toddler stage when 25% of the population belongs to a social network and maturity when 50% or 60% belong. In terms of the value aspect of social networking, we're at the beginning of the second stage [evidenced by developments such as Google's OpenSocial and Facebook opening its API].
bMighty: What's the difference between MySpace or Facebook and social networks specifically for businesses, such as Sales Spider?
Rothstein: The difference is in user expectations. Our recent member survey found that 83% of our users joined a social network for business or career development, not for friendships. That's a key difference between business and other social networks. When you're trying to connect with friends, it's about who you already know; the six degrees concept is a referral model. With a business social network, you're trying to discover new opportunities and meet new people -- potential customers and partners -- it's a discovery and lead generation model.
Most people have multiple interests. The same person who belongs to MySpace because they play in a garage band and post their MP3s may also belong to LinkedIn to look for a job, and may belong to a niche social network on Ning for another hobby or interest. Sure, there are businesses opportunities on Facebook and LinkedIn, but that's not the exclusive focus. Smaller business people will join business social networks not because they're looking for friends or a job, but because they're looking to build alliances and make money.