Blogs and social networks and wikis, oh my!

US manufacturing powerhouse Ingersoll-Rand learned the hard way how bloggers can lay waste to a product.

Its trouble began after an individual posted instructions on a Web site showing how the company's sleek but seemingly indestructible Kryptonite bicycle lock could be undone with a Bic pen. The story gradually spread over the Internet as bloggers wrote about the fatal flaw and provided links to the Web site. Within five days, the bloggers' details were picked up by mainstream media outlets such as The New York Times.

Ingersoll-Rand could have limited the damage to its brand if it had used a service to track its reputation on the Web, says David Sifry, chief executive officer of Technorati, a blog tracking and search company based in San Francisco. Instead, the manufacturer was clueless for days that its Kryptonite locks were under digital assault and had to offer a lock exchange program that it estimated at the time would cost it $10 million.

The company has learned its lesson. "Since the Kryptonite situation, we have established a person in a communications role within the communications department who is responsible for monitoring major blogs out there with respect to Kryptonite," explains a company press official at its Montvale, N.J., headquarters. She adds that the company is also looking to find out more about how to monitor the blogging community.

Ingersoll-Rand isn't alone in seeking to understand the hidden power of so-called social media services such as social networks, wikis and blogs. Most tech and nontech companies alike are equally unaware of the long-term implications of this new tech sector. They'll need to rectify this quickly.

"I honestly believe social media software will become an alternative to broadcast e-mail and an established slot in the IT infrastructure in the next five years," says Greg Lloyd, president and co-founder of Traction Software, a social networking software provider that is backed by the CIA's In-Q-Tel venture capital fund. "It will be ubiquitous. It will be the way you work."

Worldwide competitiveness across services and industrial landscapes is already compelling companies to embrace these new social media technologies, with media companies such as Knight Ridder leading the way. How companies further afield employ these new tools will very much depend on how social media application developers and an exceedingly diverse customer base jointly develop new products and services over the next few years. 

Startup and at 'em
At the moment the social media marketplace is dominated by a clutch of startups. San Mateo, California based Socialtext, and San Francisco based JotSpot, for example, are developing applications around wikis, which are online collaborative authoring systems with lightweight content management features. Massive corporations such as Finnish mobile phone giant Nokia and Disney are now trying the startups' wikis to manage projects and for basic content management.

Other startups in the US, such as Providence, Rhode Island based Traction Software and San Francisco based Six Apart are building applications around blogs, those explosively popular Web diaries presented in reverse chronological order that contain links to other Web pages and pictures. Companies in Silicon Valley as diverse as weighty Sun Microsystems and small public relations firm Eastwick Communications are using them for communicating with customers, self-publishing platforms, information sharing and creating internal company logs or bulletin boards.

Social networks -- in which large groups of people with a common personal and professional interest are pooled to find connections and share knowledge with the people who need it most -- are gaining even more popularity with the arrival of new applications providers such as aQuantive and Cloudmark, both based in Seattle. "I see a big opportunity in harnessing the community and the work of individuals to solve traditional problems of enterprise," said Martin Tobias, a venture partner at Seattle based Ignition Partners, which has invested in Cloudmark.

Unwilling to be left behind, some large technology companies, such as the mighty Microsoft and the enterprise database provider EMC, are now incorporating some of these technologies into their own products. However, most of their rivals are still trying to work out how these various social media tools fit into their technology product offerings. One reason for this delayed response to the challenge by the more nimble startups is that most corporate buyers of technology have failed to get to grips with the threat or promise social media services have to their business strategies.

Today, most corporations still do little, if anything, with blogs, wikis and social networks, but that will change quickly over the next few years as more companies integrate these technologies into their daily routines. If early signs are any indication, the evolution will lead to blogs replacing blast e-mails, wikis strengthening collaboration software and social networks taking conversations around the water cooler to a meta-level never envisioned by the most enthusiastic evangelist of the Internet boom.

Those buyers and sellers of technology that embrace the power of social media services early in the life cycle of this new tech sector will no doubt gain a key competitive edge over rivals, provided they work out how best to use the newfangled Web tools. Those decisions could well be the most important ones that executives make in the coming years.

So far, there are few obvious signs of the best corporate strategic use of social media services. The two high-tech powerhouses most in the lead of the public curve with blogs are Sun and Microsoft, both of which have established blogging Web sites for customers, partners and employees to see and use. Sun President Jonathan Schwartz and Microsoft evangelist Robert Scoble are two of the best in the corporate blogging business today.

Blog power
Many others are tapping into the power of blogs behind a veil of secrecy. A major European pharmaceuticals company, for example, has enhanced its competitive intelligence unit with Traction Software. Previously, the company's competitive intelligence team would survey published sources of information such as patent filings or drug announcements, talk to salespeople and customers and then summarise the material in a long document that would then be sent out via e-mail to thousands of people in the company.

The problem was that valuable information would often be buried on page 27 of a 50-page report or wouldn't be shared with key distribution and partners and customers because some of the information was sensitive. Traction's software established a Web log for the pharmaceutical company's competitive intelligence unit to share the information with management, sales and marketing executives. When something of particular interest to a specific executive is added to the blog, he will be automatically alerted by using search and syndication technologies. For those executives that don't want to check the Web site continually, executives can set the service to send them a daily newsletter with information relevant only to them.

Furthermore, distributors and partners can gain access to specific parts of the blog that are of interest to them but will still be prohibited from accessing areas containing confidential information. "It makes the information more actionable and valuable," Traction's Lloyd says. "Another IT customer of ours at a big pharmaceutical company got a promotion two days after deploying this within the company."

He says that Traction's software is used by 125 companies, governmental agencies and not for profit organisations, among them Bank of America, the U.S. Department of Defense and the IJIS Institute, not for profit organisation for the information technology industry.

Wikis are also slowly starting to be deployed by companies large and small. Socialtext, which offers an enterprise-class-hosted wiki, has more than 100 customers, of which 20 are in the Fortune 500.

"A wiki works because of its simplicity," says Ross Mayfield, co-founder and chief executive officer of Socialtext. "Our challenge is to make something as easy to use as e-mail with better dynamics for collaboration."

That seems to be the case at JM Family Enterprises, a Deerfield Beach, Florida based Toyota distributor that is the 15th-largest privately held company in America. Its 125 dealerships use a hosted version of Socialtext's enterprise wiki to collaborate on projects. "We're moving communication from the current point-to-point of e-mail to the new hub-and-spoke model via wiki," Mayfield says.

Indeed, sales and marketing are natural areas for wikis. In the US tech PR firm Eastwick Communications is using a Socialtext wiki to co-ordinate its public relations efforts on behalf of San Jose, California based mobile enterprise software maker Intellisync with its client's British, German and Italian agencies. Rather than trying to deal with a nine-hour time difference, different accents and busy schedules, Eastwick established a group wiki to collaborate on press releases, pitch ideas and co-ordinate major announcements. "Now there's not as much back and forth as there was with e-mail," says Giovanni Rodriguez, an executive vice president at Eastwick.