Social networking causing trouble at work?

Businesses are (slowly) discovering the value of social networking sites to brand images and building buzz. Advertisers are spending more and more every year on ads on Facebook, Twitter, LinkedIn, etc. But social networking sites may be a double-edge swords for companies.

Posts to social networking sites are mostly unregulated, and they will stay that way, for the most part. However, companies do need to monitor communications, especially for audits. This is especially important in the financial industry, as the SEC mandates strict enforcement of business communication rules. For example, one text message enabled authorities to seize documents and charge several hedge-fund executives with the Galleon Group with inseder trading.

Companies say they don’t necessarily want to restrict or block access to social networking sites, but they do need to monitor it in order to control what communication could be considered unethical or potentially illegal. What company wants to be brought up on charges because one of their employees is using their Facebook IM to talk to a family member and casually drops something that could be considered insider information, even if that person doesn’t know it?

The word-of-mouth advertising that social networking sites offer is worth millions of dollars. Soon, it may prove to be invaluable. But the potential problems that may arise could be worth millions in penalties. And in a difficult economy where companies continue to look at how to cut costs, will they be willing to take the risk at being penalized $10-20 million for potential sales of $100 million?

Aaron

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