LONDON -- The Financial Times' Innovate conference brought together speakers from world leading social networking sites such as Facebook, Twitter and LinkedIn, to discus the ways in which social media is transforming businesses across the globe.
The inclusion and expansion of social media within the daily lives of consumers is an aspect of business that causes continual debate.
The rapid, quick-fire way to share and link information within individual, community and business networks is expanding at an incredible rate; with an ever-increasing number of users globally using social networks.
However, it is necessary to ask whether the expansion of these services has the potential to cause more damage to businesses than benefit in the long run.
Usage and applications of social networking are changing rapidly, and many businesses may still be in the throes of catching up. In quick succession, more companies are using social media platforms in order to promote services, improve customer service -- for example, flight updates -- or use it to collate customer feedback.
With social networking sites becoming a part of our lives globally, at the click of a button, a consumer can impart a positive or scathing review of a company's service or performance. End-users can also use social networking in a fraudulent way -- such as fabricating a resume on LinkedIn for employment purposes. LinkedIn relies heavily on self-policing to try and regulate theft and fraudulent accounts; but this can only go so far.
The sheer speed at which a bad review or company mistake can go viral is quickly becoming the nightmare of corporations across the globe.
Speaking at the conference, James Quarles, Facebook's director for International Accounts, commented: "Risk management within companies needs to be put in place". It can take only one bad review, or one mistake by the company to be picked up on, and viral damage online can break a reputation.
With consumers able to impart this information quickly and across multiple networks to be viewed by potentially large numbers of users, is it possible for companies to control or regulate this exchange?
Companies are under increasing pressure to make themselves known online, and to maintain a more interactive presence than before, with the scope of the purely 'broadcasting' rather than 'interacting' company is becoming limited. The typical 'central command' structure of businesses is becoming less and less viable; with consumers beginning to expect direct and quick responses.
It is not only businesses that need to be aware of the risks associated with social networking.
Martha Lane Fox, the UK government's digital champion, and co-founder of Lastminute.com, admitted today that in the beginning of her business venture, she created and posted fake customer testimonials to drum up interest.
If such a practice is widespread, one would have to challenge the authenticity of information shared across social media.
If social media can be used in order to promote a company's services in a global fashion, it can also be part of 'black hat' techniques - a company anonymously is able to hire third-party bloggers or post fake reviews to the benefit of their business and deceive consumers.
The impact social networking can have within commercial markets is incredible. The collation of vast amounts of personal data and feedback can be invaluable for companies in market research, as it relies purely on the personal experiences of the consumer and can be gained quickly.
However, therein lies its weakness. Without regulation, consumers have the weapon in which to damage or improve a business, and companies in turn have the means in which to manipulate consumer opinion through fabricated reports.
As Quarles continued, regulation is 'not a perfect science'. Consumers may have to rely less on the authenticity of opinions and personal experiences shared across social media, and instead rely on their own knowledge of the business in question.