Better Connections

Business networking used to mean working a room, cocktail in hand, and seeking out the people you knew who could introduce you to the people you needed to know.

Today, online social networks are gaining favor nationwide as a way to turbocharge your existing face-to-face network and extend your reach into new industries and even internationally. By joining the networks, users have more personal control over whom they are in contact with than those who indiscriminately send or receive blasts of e-mail.

The system’s reliance on trust-based relationships can break down if users invite people they barely know into the network. Nevertheless, the networks allow contacts with far more people and in a far more effective manner than typical mixers can.

As with instant messaging, the professionals are taking up what their plugged-in kids started. Since California-based Friendster Inc. launched in 2002, millions of 20-somethings have signed themselves up and invited their friends to sign up in what has become a massive online community of friends helping friends get dates.

The business versions, namely LinkedIn and Ryze, operate in similar fashion, but with a different demographic and extra layers of privacy.

Forrester Research Inc. estimates that about 7 million people use the networks for business and pleasure. The networks will only grow as more consumers use instant messaging, create personalized Web pages and otherwise maintain relationships online.

Some 80 percent of LinkedIn users have more than 10 years of work experience, meaning they are likely also to be married, have children and have a developed a network of business contacts, said Konstantin Guericke, vice president of marketing at Mountain View, Calif.-based LinkedIn.

LinkedIn users can sift through profiles of others in their colleagues’ networks, but the system will not share contact information with people in a network who do not know each other directly, he said. LinkedIn designed its system to be referral only.

“We don’t think just because someone is four degrees away from you, you want to hear from them,” he said. Introductions have to be made by someone who knows both users.

“When the tool is used properly, it can be very effective,” said Jane Koerber-Walker, executive director of CorePurpose Inc., a Phoenix consulting and services firm. She uses the networks to build contacts in the San Francisco Bay Area and has met two potential clients there who were introduced to her by a contact in her network. She also found one of her clients work in Singapore.

Like traditional networks, online social networks must be built on trust to be effective.

Because people have to invite colleagues to be in their LinkedIn network, and the colleagues have to agree to join, the quality of the relationships tends to be high, Forrester analyst Charlene Li said.

“Your reputation becomes extremely important,” she said. “You have to protect it, manage it and grow it.”

The main advantage of social networks is that they help users meet people they otherwise might have to cold-call, Li said. The networks have become most popular in job hunting and for sales leads.

Users have found, though, that there is potential for abuse.

“Sometimes I get invitations and it’s, ‘I don’t even know you,”’ said Scott Larson, senior associate at Grayhawk Venture Partners, a Phoenix-based venture capital fund.

Having a social network takes work, too.

Larson admits he has used his more as a convenient Rolodex than as a source of venture capital deals.

“It’s like virtual networking,” he said. “You’ve got to put the time into it.”