User community growing influence on business

As social networks play increasingly important role in a company's growth strategy, so will their impact on how business policies are formed, say experts.
Written by Eileen Yu, Senior Contributing Editor

Businesses that depend heavily on social networks and user communities will need to deal with data privacy policies more carefully than their peers, experts say.

Facebook, for instance, last month bowed to user complaints and backtracked on its decision to modify the company's data privacy policy.

we're amid a shift that's happening online. Communities surrounding brands and products are becoming, and increasingly, larger part of a company's identity.
Jeff Roberto, Friendster

It reverted back to its previous Terms Of Service despite having explained that the amendment was necessary to provide the site the license to allow its users to share content.

Legally, Facebook has the right to change its terms of service policy, said Bryan Tan, director of Singapore-based law firm Keystone Law. But, whether it has sound business reasons to do so can only be determined by the company itself, Tan said in an e-mail interview.

"Maybe there is a reason that we [or the public] don't know about," he said. "Business cause has to be balanced with the stated aims. For social networking sites, they are beginning to figure out that the user community is important."

What is becoming clear, too, is that as social networking and Web 2.0 technologies grow in importance as a business strategy, so will the influence of user community and its impact on how businesses establish policies.

Tan noted that this trend will also affect the way organizations handle copyright and allow access to user data, for example, by governments.

Businesses with a strong focus on user communities must look more carefully at data privacy policies and adapt to changing user needs.

Friendster, for instance, tweaks its strategy and policies according to what its users deem "acceptable". One of the first Internet social networks to be formed, Friendster was launched in 2003 and currently has over 100 million members worldwide.

Jeff Roberto, the company's marketing and PR director, told ZDNet Asia in an e-mail interview: "As our industry grows and matures, we're learning a lot about how people utilize social media, and what is acceptable and unacceptable from communities on each site."

Keeping a close check on user policies is necessary for all social media sites, Roberto added, particularly where a lot of personal data and user-generated content are shared with people on the network.

"It is imperative that social media sites understand their users, and specifically, how they're using their site to share content," he explained. For example, Friendster observed a few years back that its users were keen to allow some people on the network, and not necessarily everyone in their contact list, to view their photos. The company then built a feature to enable users to give specific users permission to access private photos, allowing them to share content at their own discretion, he said.

As enterprises introduce user-driven features and build communities within and around their business strategy, they will have to adjust their privacy policies to environments in which customers are active participants, and not just consumers of content.

Roberto noted: "Companies should be aware that we're amid a shift that's happening online. Communities surrounding brands and products are becoming, and increasingly, larger part of a company's identity."

Tan advised companies looking to integrate social networking and other Web 2.0 tools into their business strategies to know their users well.

"Decide how you want to balance privacy policies," he said, adding that these policies should be written in a clear, simple language that can be easily understood.

Roberto noted: "The key to establishing user-acceptable privacy policies starts with understanding your users and your community. It's important for businesses today to work with customers to embrace a policy that fosters great community and encourages participation around the product or the service."

In fact, the community companies build around their products and services is not only part of their brand identity, it is also an important part of these companies' "voice" online and offline, he said. Hence, businesses can and should harness the potential of these user communities to build positive "word of mouth" marketing campaigns, he added.

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