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| Technology |
Networking Overtime
David Teten and Scott Allen
07/01/2004
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Even members of the most selective private clubs now find online social
networks a highly effective way to meet just the right romantic partner or
business client. Online dating, once seen as a refuge for the socially
unskilled, today generates more revenue than any other category of legal paid
online content. More than 40 million Americans visit at least one online dating
site each month, according to research company comScore Networks.
Given the
success of online dating, people want to leverage the same technology for
business relationships. We might meet two people at our golf club who furnish us
with great investment opportunities, or who could be investors in our own
ventures. But by utilizing social software—applications that arrange
introductions and connect networks of acquaintances—we can sit at a computer
screen and meet 15 such people in the same time.
The software works by
tracking links between individuals. Most of our relationships now leave a
digital record, and companies such as Spoke Software have developed systems that
read our email trails and quickly analyze each person’s network of contacts. For
example, a sales rep targeting General Motors can search Spoke to see who among
her colleagues knows an appropriate purchasing executive at the
company.
Venture capitalists have invested more than $50 million since 2002
in companies that make social software. Angel investors such as Esther Dyson and
Mark Pincus (CEO of Tribe.net) have backed some of the leading social software
vendors. Most of the companies that use this software operate in the mass
consumer market. In the near future, however, we are likely to see the formation
of more invitation-only online clubs, which will attract senior professionals.
Anyone who keeps a staff of executive assistants as a barricade might
justifiably wonder if funding a social networking company might turn out to be
an exercise in self-destruction. As a result, investors are urging the software
developers to build in privacy buffers, so that even very prominent people will
eventually find it worthwhile to participate. This will boost both the sales and
investor appeal.
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