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The phenomenon of online social networking, made popular by sites such as MySpace and Facebook, continues to grow. For businesses, social networking offers a relatively inexpensive way to increase and enhance collaboration among workers, share knowledge and deliver information to employees, business partners and customers.

Social networking Web sites bring together people with common interests, enabling them to communicate with fellow members about a variety of subjects or concerns. Members of an online community can contribute content to the site whenever they want. For instance, they can post a blog, host a podcast or participate in discussion forums.

One of the biggest advantages of social networking is that people from all over the world can easily gain access to the sites and the information posted on them. Social networking sites can include collaborative tools such as instant messaging, blogs, discussion boards, chat rooms, file sharing, video and e-mail.

Among the potential benefits of social networking for business is the ability to find people who can excel in specific job functions. As Web-based collaborative tools enter the workplace, organizations will leverage social networking, blogs and other tools to ensure that the right people with the right knowledge are in the most appropriate positions, says Jason Averbook, CEO of Knowledge Infusion, a consulting firm that specializes in human capital management technology.

Companies can also leverage social networking to learn more about their customers, says Mary Wardley, research vice president for CRM applications at IDC. The rapid expansion of social networking is creating opportunities to better understand customers, their behaviors and their preferences, Wardley says.

The use of social networking tools can have benefits for IT as well as for the business. For example, organizations can use these resources to find people with specific technology skills and expertise. And CIOs and other senior technology executives can use the sites to glean information on best practices and get some career advice.

Not everyone is convinced that social networking technology is the answer to all communications problems. "At the moment, social networking is [considered] the all-singing, all-dancing panacea to every problem from poor customer service to employees that won't talk to each other even though they sit in the same cube farm," says Patrick Gray, founder and president of the Prevoyance Group, a strategic IT consulting firm. "Once the hype wears off, I think social networking will be seen just like the so-called Web 1.0—yet another tool that when leveraged correctly can produce business value."

For companies where ad hoc teams across multiple regions are already working well together, "some of the new social networking tools can add fuel to the collaborative fire," Gray says. "I particularly like those that allow a group of people to self-create resources without having to go through any IT process." The ability to create an area where co-workers and partners around the world can share files and discussion without any formal IT setup will be a trend of the future, he says.

"For businesses, social networking can help speed collaboration internally and be a huge aid to projects that go outside traditional organizational boundaries," Gray says. "Looking at customer-facing applications, social networking provides cheap access to customer opinion in a very short feedback cycle."

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