The Revenue Impact of Enterprise 2.0

I recently read a great study that looked at the impact of social networks inside companies. Information, Technology and Information Worker Productivity was written by academics at MIT, NYU and BU. The authors analyzed the social graph of employees for a 14-office midsize executive recruiting firm.

The firm didn’t actually have a social networking application in-house. It was all email. But what the authors did is look at the email connections of workers to extrapolate their social graphs. And what they found was enlightening.

I encourage you to read the study itself, as it has a wealth of good information in it. I’ll call out my favorite observations from the report:

A one standard deviation increase in betweenness centrality in the email network is associated with approximately $76,000 greater revenue output per year controlling for human capital, demographic variables and use of the ESS system.

A one standard deviation increase in network diversity is associated with approximately $83,000 greater annual revenue output.

Betweenness centrality: What’s the probability that an individual will fall on the shortest path between any two other individuals? This attribute measures the strength of an individual’s connections to other employees. Sort of a probability-based LinkedIn.

Network diversity: Measures the degree to which an individual’s contacts are connected to each other. If your social network consists of people who all know each other well, your network diversity is low. If your social network has a lot of connections that don’t know one another, your diversity is high.

Here’s what the network diversity impact looks like graphically:

The folks with the best access to a diverse set of opinions, knowledge and perspectives outperformed their peers.

How Do You Make These Findings Actionable Across the Organization

The author’s looked at the connections people had built on their own, and those who had the best, most diverse networks outperformed everyone else. What Enterprise 2.0 does is take these characteristics of the top performers and exposes them for everyone else in the organization.

If you force your employees to create these networks on their own with the existing offline relationships and siloed data, you’re not going to create opportunities for network improvements across the board. By making employees perspectives and work visible and searchable, you put every employee a step ahead of where they are now

I’ve got a fuller write-up over on the Connectbeam company blog. Check it out if you’re interested in developing an ROI of enterprise social software.

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You Know, If Yahoo Could Actually Focus, They’d Be a Helluva Lifestreaming Service

Yahoo announced its latest effort around making itself more social.  And unlike previous efforts (Mash, Yahoo 360), this one has potential.

Yahoo beta released the “Universal Profile”. To be honest, the initial release is underwhelming. Here’s what mine looks like:

The profile includes the picture + bio + interests that we’ve come to expect. What else?

  • Status Update = Facebook status, Twitter
  • Guestbook = Facebook Wall
  • Connections = any social network
  • Updates = Facebook news feed, FriendFeed

A Compleat Social Profile. Well not really. But it has potential.

Interestingly, the Status Update is a 140-character field. Not 125 characters, not 150 characters. 140, like Twitter. That probably says something about future Twitter integration.

Lets focus on that Updates box there. Because that’s where maybe, maybe Yahoo can finally integrate its disparate Web 2.0 properties.

Facebook, FriendFeed Have Been Enjoying Yahoo’s Sites

FriendFeed nailed the idea of pulling updates from different services. 43 of them currently, including three Yahoo properties. Check ’em out on FriendFeed:

Facebook, seeing the possibilities in lifestreaming, added feeds into the news feed. So now friends can see your activities on external sites as well, including Del.icio.us and Upcoming.

Currently, Yahoo’s beta release doesn’t include updates from those services. What is included? Yahoo 360, Yahoo Buzz, Yahoo Avatars (huh?), Yahoo Shine. I tested the update timing. Yahoo Buzz updated quickly onto my profile. I created blogs on Yahoo 360 and Yahoo Shine (yes, the women’s site). Neither blog post ever showed up on my profile.

So the initial profile is a bit underwhelming, the sites that feed into the profile are limited and activities don’t update from the sites that are available. Wow.

OK, not the biggest endorsement so far, but read on…

The Yahoo Advantage

Yahoo has three distinct advantages in the lifestreaming race:

  1. Traffic
  2. A set of sites that lend themselves well to lifestreaming
  3. Email/IM social graphs

Traffic

Yahoo draws the second highest traffic in the United States. For reference, here are traffic stats for Yahoo, Facebook and FriendFeed:

Critical to these lifetreaming social networks is having a sufficient number of users. Twitter has maintained its dominance in microblogging despite the emergence of competitors. Biggest reason? Everybody’s already there.

Yahoo ‘s lifestreaming starts with a critical mass of potential users.

Lifestreaming-Oriented Services

Yahoo has a number of sites that lend themselves well to lifestreaming, as mentioned above. The users of these sites are already putting things into the public domain, a psychological hurdle for many people in terms of social networks. While these sites aren’t available yet, Dan Farber reports that they will be soon.

Two services merit particular call-out here: Yahoo Buzz and Twitter.

Yahoo Buzz is Yahoo’s answer to Digg, Reddit, Mixx and other social news sites. Users submit stories, and other users can vote them up or down. Apparently, Yahoo Buzz delivers huge traffic. TechCrunch reported its single highest traffic day ever thanks to a link on Yahoo Buzz. And ReadWriteWeb reported that Yahoo Buzz had overtaken Digg in terms of visitors.

What I like about the integration of Yahoo Buzz into the Yahoo Universal Profile is that it becomes quite easy to see what users are interested in. It also becomes a great way to find stories via your social network.

Twitter is the best-known microblogging service, and competes quite well with Facebook’s status updates. Twitter is enjoying network effects allowing it to pull away from its competition. The 140-character Yahoo Universal Profile status updates are now available. I’d like to see how Yahoo either integrates Twitter into its experience, or creates a distinct microblogging experience built on Universal Profile status updates.

Email/IM Social Graphs

In the Yahoo Universal Profile, you are provided with a list of 10 connection recommendations. How are these recommendations generated? Check out what Yahoo says:

Now in a lot of ways, this is no different from uploading your email contacts to a social network and inviting people. The difference here is that these contacts are already using Yahoo. And Yahoo has the advantage of exposing lifestreaming via the email and IM that people use. Not as some third party social netowrk where a lot of people won’t bother to show up.

This goes back to the existing user base of Yahoo. If Yahoo can figure out how to put lifestreaming in-the-flow of its users’ daily interactions with the site’s properties, it’s got huge upside potential with this idea.

But Yahoo Is Always So Distracted

The latest distraction is the news that Yahoo will be laying off a lot of people. This follows the Microsoft acquisition attempt drama. And Yahoo has a history of acquiring sites, but not doing much with them. And many people question just what Yahoo is doing with this Universal Profile:

Don’t really see a point in setting up a profile on Yahoo!. I mean, I see the company’s goals here, but I do not see any user benefits. After all it’s just another Facebook, however tied to a dying Search Engine.

There is justifiable skepticism that Yahoo can actually pull off creating a vibrant, useful lifestreaming service. If Yahoo could pull it off, here’s what it gains:

  • Higher page views
  • Longer page views
  • Exposure and growth of its many sites via the lifestreams of a user’s social graph
  • A clear and distinct advantage over Google and Microsoft
  • An ability to lead the technology conversation again

I’m rooting for Yahoo from this corner. I would love to see Yahoo bring lifestreaming and social networks to the mainstream.

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