Google Wave: Users may need it, but it will be hard to get them to use it

Yesterday, at the Google I/O developer conference in San Francisco, Google unveiled a "developer preview" of a future offering called Google Wave. Wave is a re-imagination of an email system - from the backend server to the messaging protocols to the client interface. It is designed to do what Google thinks a modern communication system should do (it was conceived by the Rasmussen brothers, the same who were responsible for initially developing what would become Google Maps).

Why is Google Wave so intriguing? Because of:

• Its core capabilities. Google Wave enables enhanced communication between multiple users in communication packages called waves. Waves are like threaded emails on steroids. It is possible for a user to insert comments in the middle of a wave, link waves to each other, add a participant to the wave at any time, use the system like an instant messaging (IM) system to deliver real-time comments or like an email system to deliver fully formed thoughts, collaborate on a document and show or hide revisions, rewind the wave to see its detailed evolution, and to apply privacy standards to portions of the conversation. And those are just some of the highlights.
  
  
• Its open protocol. One of the reasons Google received a large amount of media attention - traditional, community site, blogger - is because the for-profit company is making the protocol open and available to all. For example, those interested can read about and begin to build competing systems based off of the draft Google Wave Federation Protocol (see the official site here). This protocol is critical as wave systems are designed to be federated - a fancy term for allowing seamless interoperability between systems administered by different entities, including public service providers like Google and private organizations.
  
  
• Its extensible design. While the core capabilities Google showcased at the conference highlighted some powerful new ways to communicate and collaborate, the extensible architecture of the wave system will enable developers to significantly enhance Google or other wave offerings (read about the APIs here). In the same way public map APIs for services like Google Maps enabled amazing new services and sites, the wave APIs will enable embedded capabilities, connectivity options, and other enhancements that will make Google Wave and its competition even more compelling.

With its core capabilities, its open protocol, and its extensible architecture, Google and many others imagine how wave systems might not only replace traditional email, but also replace proprietary IM systems like AOL's AIM, social networking messaging and site posting services like Facebook's Wall comments, short messaging offerings like Twitter, WebEx-like conferencing solutions, and other communication and collaboration services.

Big dreams, big hurdles

While Google Wave is appealing to many in the industry in terms of its goals and current execution, even at this early pre-beta stage of its life, there are some massive hurdles to overcome in order for wave systems - from Google or any other company - to be successful. Top problems include:

1. Everyone needs to be on a wave-capable system. To enable any of the rich communication described previously, all users need wave-capable systems, either from Google or from other providers. This is fundamentally why Google designed the system to be federated - that is, make it work with a series of distributed wave backend systems from Google, other vendors, ISPs, organizationes, etc. - and to make its protocol open. If only one side of a one-to-one or one-to-many conversation is wave-capable, the rich functionaiity is useless. Which leads us to point No. 2 ...
   
   
2. People must accept and embrace the wave client experience. While Google made clear that wave frontends may differ depending on who develops a wave system, the most important point from an end user perspective is that a user must be willing - or be forced, if a requirement of a job or a project - to learn how to use a wave interface with its much more complicated layered, embedded, and ever-changing views. While Google engineers and technophiles may salivate over the usage and interface possibilites, user may not know, understand, be trained, or care about these features. To them, a complicated, multi-person wave may be an incomprehensible mess. Add to this the ability to extend the wave system and significantly change how it behaves or looks, and the issue of ease-of-use may turn off many potential users.

The good news for wave advocates: Communication is reaching a breaking point with disjointed services

While a wave system and its client front end might repel some users due to it complexity, the fact is that people today - in their personal and work lives - are jumping through amazing hoops to communicate with a massive range of disparate systems, each with its own interface and quirks. For example, a typical minimal set of communication tools for a well-connected person these days might include seven or more accounts (it could be more or less, depending on IM choices, social network memberships, etc.; see below)!

A non-technophile - soccer mom, granddad, or waitress - might need to check:

1. Email. The simplest form of electronic communication, it can be one-to-one or one-to-many. It is asynchronous, meaning the two participants don't have to be communicating at the same time, though it can end up being very much like chat if the participants respond quickly. Attachments of any size and type - photos, music files, documents, etc. - are relatively easy to send and receive.
   
   Required: All that is needed is an email account, either from an ISP (e.g., Comcast, Verizon, etc.), a personal domain (e.g., newrowley.com), work, or a Web-mail provider (e.g., Yahoo Mail, Microsoft's Hotmail, Google's Gmail, etc.). Interoperable standards (e.g., SMTP, POP3, MIME) mean that no matter the service type, the email should get through, though their will be different capabilities around features such as formatting, attachment display, etc. Despite interoperability, people tend to have more than one email account (e.g., one for work, at least one for personal user), and most don't aggregate the accounts - or can't - into a single reader.
   
   
2. Instant messaging (IM). IM is really just short email-type messaging that is quickly responded to. Unlike Tweets, there is often no substantial limit to message length, but the nature of the communication and the disjointedness of attachments makes it good for quick, back-and-forth communication with the occasional attachment.
   
   Required: Users need IM accounts, usually separate from email but not necessarily so (e.g., Gmail users can use their account to access Google's IM). Differing IM standards mean that (Jabber aside), unlike email, users often have multiple accounts or rely on one network and thus limit their IM interactions.
   
   
3. Mobile texting. Like IM, cell phone texting is generally for short messages and the occasional image (through MMS). The line is blurred when users leverage smart phones with multiple communication capabilities (e.g., Blackberries or iPhones). A user may feel that she is texting (SMS), but the message may be handled by a different application with different protocols and capabilities.
   
   Required: Mobile phone and a texting service (or a plan for reduced cost for frequent users) are required. Despite the tiny bandwidth required for text messages, the most aggravating issue with texting is cost. It has been pointed out recently that wireless companies charge an exorbitant rate for the service, apparently because they can, not because the cost is aligned with their infrastructure requirements.
   
   
4. IP-based voice and video. Audio and video calls, for example, using Skype, can replace traditional voice telephone communications - land and mobile - as well as traditional IM services (IM capabilities are a standard features of these types of services).
   
   Required: An account with a service is required, but a user also must have access to the Internet and a computing device to run the client software (including a microphone and speaker/ headphones). While many traditional IM systems now offer voice calls, and many offer video, the systems are not interoperable, so membership in a popular service is critical. The result is a user might use AIM for IM needs and Skype for audio/video calls even though only one would be technically required.
   
   
5. Social network intra-site communication. All popular sites like Facebook have an internal system for communication (e.g., posting to the Wall for public messages, using the email-like messaging system for more targeted communication).
   
   Required: A social networking account and "friends" who have approved each other to send and receive messages is the foundation of this type of communication. While some social networks and technology providers are moving towards some interoperability - at least they are talking about it and proposing some interoperable solutions - the reality is that most users have to maintain accounts in any site they find valuable. As a result, a typical user might have a Facebook and LinkedIn account, if not more.
   
   
6. Blogs, community site, and media property forums/commenting systems. For those who like to post their thoughts or engage in online debate, accounts are required at sites like The Economist, Slashdot, and Engadget (some sites allow anonymous posting, but then a user has no persistent identity and commenting history). For some people, this form of communication can be active and pushed if they sign up for RSS feeds and other notifications.
   
   Required: Accounts with any sites that a person might want to provide feedback or comment at. This could be anywhere from one to tens of sites.
   
   
7. Twitter and similar services. The current poster child/media darling of modern communications is Twitter. The 140-character per message service enables users to post what they are doing or thinking as well as follow the comments of others, be it friends, family members, colleagues, or celebrities.
   
   Required: Accounts with Twitter or other similar services are required. In addition to the accounts, the user may also invest in an application specifically designed to post their Tweets and display the content of all of the people they are following.

Wave service providers' to do lists

The key for Google and all wave system proponents is to ensure that the offerings:

1. Work with existing communication systems, especially traditional email. There can't be an issue for users of choosing the old world or the wave world. Wave systems will need to be a superset of current communication systems, with backend services capable of tying into existing email, IM, audio/video and other technologies and protocols. The transition must be seamless - unknown to the masses.
   
   
2. Hide complexity by default, only exposing advanced capabilities to those who want it. Technology companies are getting somewhat better at hiding complexity, whether it is with menus that only show what users need (e.g., the ribbon in Microsoft Office) or sliders and checkboxes for displaying advanced features (e.g., the iPhone settings). Video walkthroughs of products and interactive demos will help users learn about new wave-enabled features at their own pace.
   
   
3. Let sites deliver branded experiences. Many sites, particularly social networking sites, don't necessarily want to be open. The concept of a walled garden always appeals to those with large, popular communities and to those that fear that being open makes it too easy for users to leave (and revenue to dry up). The idea of federated social sites, backed by wave systems, will scare most social networking executives even as they make life easier for users. Providers like Google need to ensure that waves can fit within branded site and service experiences in the short-term.
   
   The reality, in the long term, is that many popular sites will die out in a wave-dominated world. The good news? As always, others will take their place (think of the histories of America Online, Yahoo!, and Google).

So, while wave systems are interesting, don't expect them ever to visibly take over the communication world. As they succeed, they will do so behind the scenes, slowly replacing the technologies and services that we take for granted today.

By: Tom Rhinelander

From B (Bing) to Z (Zune): Microsoft's branding issues

Microsoft is about to deliver a new brand to the world: Bing. The name is for the company's refreshed Internet search service (it replaces the current Live Search moniker). Like Microsoft's other nonsensical consumer brand, Zune, Bing is one of those made up names that doesn't tell you anything about the product -- a brand that can only be successful through a combination of user adoption and a generous marketing budget.

Just bing it?

Is Bing a good brand? The name certainly seems designed to create a counterweight to the Google name and brand. Does Microsoft expect people to say "just bing it"? Do they expect users to "google it with bing"? With enough money and resources, almost any brand from a major industry player, no matter how much sense it makes or whether seemingly relevant, can gain reasonable traction. Microsoft can certainly establish some relevance and mindshare given the budget it is willing to devote to the cause, but does it make the most sense? The obvious alternative, of course, is a more pragmatic brand (Microsoft Search). So are they just burning cash promoting the Bing name? The answer to that question often depends on what school of branding you currently attend.

Unique or Pragmatic: Both can succeed

Being in a brand name (or logo or color) selection meeting is in many ways as frustrating and time consuming as choosing a child's name. And the result is often the same -- significant parties consulted during the effort and many of those who hear of it later think you made the wrong choice. Everyone has an opinion, and while some are based on time-tested methodologies and others rely on the the latest brand creation mindset, often times the result is determined by less scientific means.

Even when leveraging focus groups, the decision will still often hinge on a "golden gut." From personal experience, some decent names are simply rejected because they don't work for senior staff. Why is your child not named Dave? Because Dave was the name of the boy that your wife hated in middle school. Why is the product not X? Because it reminds the CTO of a previous experience or some faulty product, perhaps in an entirely different industry. Anyone with experience in these matters can offer up their own colorful anecdotes of why something that made sense was shot down by a C-level company officer.

So let's look at the two primary schools of thought:

• The "unique separates you from the competition" school. Branding experts often advise companies to select a name that is unique (Bing), that can become associated with a product through intense marketing, but that cannot be copied (Google). Google obviously created meaning out of nothing, as did Amazon. RIM has had an incredibly successful run with its Blackberry phones, despite the name not implying anything about communication or enterprise-class management features. And Palm has been generating a lot of attention with its upcoming Pre phone.
  
  Note: Of all those mentioned, that last name seems the worst. Pre sounds like a prefix of something, not an actual thing, It will also be a much harder term for successful search engine optimization (SEO).
  
  
• The "pragmatic looks boring but gets results" school. Some of the most successful brands recently have had more pragmatic (or descriptive) names that at least in some small way relate to the actual product function or look. Apple's iPhone, iPod, and MacBook names somewhat describe their product -- it takes just a moment to figure out the connections. The choice of PlayStation by Sony is easy to understand. Microsoft's Windows is very obvious, while Xbox is at least somewhat self-explanatory (and it has an "x" in it, which was Microsoft's answer to Apples "i" everything). The names salesforce and openoffice are pretty self-evident, while it is impossible to misunderstand what the Oracle Database is about.

A look at some of Microsoft's erratic branding behavior

It is ironic that for years the computer industry has been trying to emulate the branding success of the consumer packaged goods (CPG) industry. Steve Ballmer, the current CEO of Microsoft, worked for a short time at CPG powerhouse Proctor & Gamble (P&G), often held up as the gold standard of consumer branding. But Microsoft's recent branding missteps seem to illustrate that the company and its CEO have not become anything like the branding and brand management powerhouse of P&G.

To understand the company's branding issues, let's look at some of the recent Microsoft branding efforts.

• Unique names (long-term success unknown):
  
  Bing: Microsoft's re-branded and enhanced search service is touted as a "Decision Engine" by the company, similar in claim to Wolfram Alpha's recently released "computational knowledge engine" service (try it out here), but very different in execution. Microsoft's made-up name seems to connote an offering from a hip Silicon Valley startup. Just a day ago it was called Live Search. Bing is trying to catch up to Google search in terms of use, and thus search advertising revenue (read the Microsoft release here for some official positioning).
  
  It is too early to gauge the success of the name, but the simple fact that it is Microsoft's primary online search tool means that it will not fail.
  
  Zune: The Zune is the name of a family of Microsoft offerings centered around buying, managing, and playing digital content, such as music and movies. It is similar in scope in many ways to Apple's iPod, iPhone, Mac, and iTunes Store ecosystem, except that the Zune name is carried across the product line. Unlike the iPod or even iTunes names, the Zune name has no relation to anything it does or is about. The recent announcement of the iPod touch-like Zune HD -- where the HD stands for high definition, but in this case radio, not video -- demonstrates the problems with this branding effort. Consumers are likely to confuse the product for a high-end video device (thought the screen is improved). In addition, the brand is being extended to the Xbox world as a content store, making it hard to understand the various stores, devices, and services.
  
  At this point, the Zune brand has not had a tremendous amount of success due to the lackluster sales of its music/video devices. The Xbox link may help, but Zune seems to be a case of choosing a unique name and then force-fitting it into too many places while simultaneously having it clash with other successful brands (Xbox). The results and confusion seem not worth the effort.
  
  
• Names close to function/product (mixed bag of results):
  
  Silverlight: This is Microsoft's answer to Adobe's Flash. Its name makes sense when compared to the competition (light versus flash). The name seems fine, but the product's big challenges are not only unseating the dominant Flash, but also fending off emerging Web standards, such as embedded video support that is coming with HTML 5. Given the renewed browser wars (Internet Explorer versus Firefox versus Safari) and the emphasis on compatibility with standards, Silverlight, name not withstanding, will have a tough time gaining traction.
  
  Azure Services: Azure is the cloud service offering by Microsoft. The name is a bit confusing, as it describes the color of the sky (blue) and not the color of a cloud, but it it is close enough to make sense -- and it is a real word so it is easy to digest. Azure's problem is the competition. It competes with existing services such as Amazon's EC2 (Elastic Compute Cloud). EC2 is an interesting name, as its acronym appeals to technophiles, while its name says exactly what it is about. But Microsoft, which has been so successful driving its server products into organizations and hosting companies, will most likely find, at the very least, relative success.
  
  Xbox: More edgy than PlayStation, but, like the iPod name, the Xbox moniker is related to what it does. It is a game console -- a box for playing games. And no doubt the "x" in the name was not only chosen to line up with other Microsoft x-names, but also because of its suggestion of the X Games, popular with the same demographic as hardcore console gaming. The 360 name (the original console was called the Xbox; the second-generation is called the Xbox 360) is believed to have been in response to the "3" in the PlayStation name (while the Xbox console was only in its second iteration, it would sound like it was in the same league as the PlayStation 3). This name has been an unqualified success. The only issue will be how Xbox and Zune are used together.
  
  Others: MSN, while out of style, was built to compete with AOL, another three-letter acronym. The name made sense, but MSN is no longer the focus of most consumer branding from Microsoft. C#, the name for a Microsoft computer programming language, also makes sense -- it is an enhanced version of the C++ programming language and is designed to take on Java. Microsoft Exchange, the company's email system, is another name that is close to what it does and is also easy to remember.
  
  There are a variety of other successful names in this category, including Word, PowerPoint, and Access.
  
  
• Pragmatic names (very successful):
  
  Windows 7: Windows is perhaps the ultimate example of successful pragmatic/descriptive naming. Replacing Windows Vista, a name that placed half the brand in the "unique" category, Windows 7 is about as obvious and as easy as possible to grasp. Now, if knocking Microsoft for Vista, you could perhaps knock Apple for its cat names for its operating systems (currently Leopard, previously Jaguar). One could argue the cat names trump the purely descriptive name of Vista, but both have their issues. However, Apple customers are used to creative branding -- many relish the old Apple slogan "Think Different" -- while Microsoft caters to a large base of PC users who just want a functional machine. For the majority of business and consumer users, pragmatism is the way to go.
  
  Internet Explorer 8: While it has a history of not being standards-compatible, Internet Explorer (IE) is a well-known brand and on par in terms of ease of understanding as other Microsoft names, such as Windows and Office. The biggest issue with the name is that the vast majority of PC users may not even know it -- they simply think of it as the Windows Web browser. Browser competitors have more colorful names (e.g., Firefox, Safari, and Opera), but they have to fight an uphill battle to even get installed on PCs. Most consumers just don't care about browsers. So, IE, while a good name, also wins by default for most computer users.
  
  Windows Media: Windows Media Player is an interesting name, because while not as catching as iTunes, it is more accurate. iTunes started off life (from the SoundJam acquisition) as a Mac-based music manager and player, but has since become a dual-platform player and manager for podcasts, TV shows, movies, and everything in between, as well as the interface for the iTunes Store and the hub for syncing iPods and iPhones. In fact, Apple felt compelled to change the name of the iTunes Music Store to the iTunes Store, and, even today, video and other content for iTunes is filed under a top-level music folder. In contrast. Media Player 11's name still holds true. As with IE, though, since it is the default software on PCs, many consumer don't even know its name.
  
  Other names in this category include Microsoft Office and Virtual Earth.
  
  
• Names that dilute (largely unsuccessful and damaging to existing, powerful brands):
  
  .NET: .NET wasn't a bad name - it falls into category No. 2 or perhaps 3 - but it was abused and tacked on to everything (eventually to be separated after much confusion). .NET lives on successfully, but in a much more contained world.
  
  Live: Like with .NET (and Active before it), Microsoft marketers attempted to apply one label to many diverse online services. The worst practice was combing an existing, well understood product name with Live no matter how different from the offline version. The initial Windows Live name and product had this problem.
  
  Windows: Yes, Windows was noted as a success above. But while desktop and server Windows is an excellent brand name, it has been applied to so many products that it is hard to understand what it means anymore. It's really any operating system the company produces. Compare that to Apple, which makes Mac OS and the iPhone OS.

All this divergent branding can catch up. For example, the text of the login page for Windows Live services shows how erratic the naming can be: "One Windows Live ID gets you into Hotmail, Messenger, Xbox LIVE." So you have Windows Live as a top level brand, based off a successful product but that does not equal a "live" version of that product. Then you have Hotmail, a pragmatic and colorful holdover name; Messenger, a pragmatic and non-creative name; and Xbox LIVE, a strange combination that capitalizes live when services on the same page don't! It seems like no one is in charge some times.

Branding is expensive and branding mistakes are costly and embarrassing

Unique names are very expensive to market if a company wants a dramatic, global launch, as Microsoft is doing with Bing (they can gain traction slowly and with minimal cost, as Google did, if a company has patience). Every new brand requires marketing dollars, but unique ones require additional dollars to create a now non-existant connection with an unrelated service/product. Bing and Zune are both expensive and still unproven brands despite tens of millions (or more) spent on marketing programs.

Certainly there are places for both the unique and pragmatic brand. The obvious split is between consumer services and business offerings. However, when you have a product like search, there is no clear market split. By choosing the more consumer-friendly approach, Microsoft has chosen to take on market leading Google with a similar name. The selection can be seen as copying and weak. In reality, Microsoft Search should be enough, and Bing, in fact, doesn't even present itself at this point with much Microsoft branding. So in the end, even if Bing is successful, how does that relate to elevating the company brand (something Microsoft was very interested in doing with its advertising campaign last year)?

Few will agree on whether the branding effort for Bing was correct -- at least not until more than a year has passed. However, in a time of declining profits and revenue (year-over-year; see the official release here) -- the first ever, reported last quarter -- expensive, unique branding like Bing may be a course Microsoft might reconsider for its next major launch or product overhaul.

By: Tom Rhinelander

Resisting the pressure to blindly board the social networking bandwagon

Marketing professionals at software and hardware vendors, whether experienced VPs or 20-somethings fresh on the job, are quick to extol the value of social networking services for their businesses. Technology pundits and consultants echo this sentiment, reinforcing the perception that not having company-sponsored Twitter or Facebook accounts will doom an organization. But despite all this enthusiasm – all this pressure to get with the social networking program – should companies selling databases and server appliances devote scarce marketing resources to activities that in many cases have shown little or no ability to generate increased revenue or profits? At the very least, it is a question that should be – but often is not – asked before resources are committed and brands and other PR efforts are impacted.

The goal of this article is to explore the motivations for jumping on the social networking bandwagon and discuss if dedicating significant marketing staff and budget makes sense for many companies. But before we examine the question posed above, some key points about the context and parameters of this discussion should be highlighted:

• There are many forms of social networking. Just as with most tech terms, such as Web 2.0, there is no single, accepted definition of what social networking is and what it is not. For the purposes of this discussion, we are going to limit the breadth of the topic to services that enable networks of people and organizations (e.g., LinkedIn, Facebook, MySpace, etc.) and those that enable concise, syndicated content creation and publishing (e.g., Twitter). Blogs may be part of social networking, and other technologies like instant messaging and anything with an RRS feed could also be considered, but not in this discussion.
  
• Social networking is not free. There is no free lunch, even on Facebook. Due to the almost non-existent or minuscule cost of setting up social networking services, there is a general perception that leveraging the “free” services for marketing entails very little cost. However, social networking only works when there is significant time invested by salaried employees or paid consultants. For example, at many companies I have worked with, high-priced PR agencies are in charge of managing a company’s Twitter account, making each Tweet relatively expensive.
  
• Let’s not argue about personal rewards. For many people, social networking offers an unquestionable personal return. Many who use Twitter, LinkedIn, Facebook, and other prominent as well as obscure services enjoy the experience. With the overall user base dramatically increasing – Facebook alone reports over 200 million users – and with many of these users extremely attached to the services, social networking dissenters are often digitally pilloried. But personal enjoyment and satisfaction is not what businesses are about, so non-work related affinity for a service should not play a part in terms of this discussion.
  
• The topic is relevant to for-profit, product-centric companies. It is obvious and reasonably well documented that social networking services can be excellent PR vehicles. But not all exposure is welcome, and PR does not generate significant dollars except for certain types of companies. Therefore, this discussion will ignore organizations that don’t care about profit (e.g., government agencies, non-profits, many startups, etc.) and those that derive significant revenue from advertising (e.g., media sites, blogging communities, etc.). Instead, the aim is to focus on companies – specifically technology software and hardware vendors – that desire, are designed, or are compelled to generate revenue and profit year after year. While the focus is tech-centric, parts of the discussion will apply to companies in other industries.

Motivations: Why go social?
As a business – or an employee of a business acting as a representative of that organization – why even sign up for a free Twitter account or some other social networking service in the first place? The motivations fall into some broad categories:

• To spread the word. Social networking can be a great vehicle for enhancing communication, assuming a couple of “rights”: The message is the right one and the target audience is the right one. This PR aspect of social networking is the most commonly espoused by its proponents, who argue that the various services are excellent for conducting all types of activities to “get the word out” and generate marketing buzz. Beyond basic PR, social networking can be used, among other things, to promote service and product launches or updates, publicize events, and announce company activities. From these examples, it is obvious that this aspect of social networking is active and outward facing and requires coordinated messages and company sanction to be most effective (rogue employees twittering may gain attention, but it may be the wrong kind of attention).
  
• To get smarter. A common argument for being involved in social networking is that being a participant in the various networks enables employees to learn about all sorts of important things – and learn about them more quickly than they would though alternative channels, such as news and community Web sites. Examples include being alerted to competitive product releases (perhaps a new beta of a service) and industry news that may impact the business; finding out answers to questions, such as support problems or best practices; gathering feedback from customers and prospects; and staying in touch with other influential, smart, and interesting industry people.
  
• To look like you “get it.” While the first two categories are positive, this social networking catalyst is negative but all too common. You may be surprised by how many marketing executives, with zero data on the business return, are touting and rapidly embracing social networking because either it is the “in thing” (peers, friends, or so-called experts say so!) or because the fear of not doing is too intense (a real or perceived backlash from prospects, customers, analysts, peers, investors, and C-level executives). This adoption driver is reminiscent of the old image of everybody rushing to the same side of the boat for no other reason than everyone else seems to be going there.

It is interesting to note that this discussion almost exactly mirrors the arguments for and against a slightly older form of two-way communication: blogs. And not surprisingly, the same issues that are still unanswered with corporate blogs (the business return, the role in marketing, etc.) come up when discussing the value of Twitter and other social networking services.

Reasons to temper social media desires
Given that many marketing professional will still think is makes sense to invest in social networking even without hard ROI evidence or believable projections, it is time to look at some of reasons not to embrace these services. We’ve already touched on the some “pros” (the motivation section above), so let’s examine some “cons”:

• At its best, social networking is personal. Social networking, by definition, is about people communicating with each other. Blog post by faceless authors are usually received with as much interest as press releases. Injecting personality and opinion is what drives readership. However, by making communication personal, a company risks having followers relate to the individual, not the organization. That can mean that if the person leaves the company, the audience that was gained goes with him or her (Robert Scoble leaving Microsoft is an example of this). There is little long-term institutional gain or knowledge transfer from the social networking efforts of these non-state actors, except short-term exposure. The investment in the successful corporate Twitter user is lost to the company when he or she walks out the door.
  
• Messaging and interaction is hard too manage. While many people yearn for complete freedom of expression, the reality is that companies need to have unified, at least somewhat sanctioned communications. In this age of high-profile financial gaffes and disasters, delivering “material” information to the market can have dire consequences. While a great Tweet, like an interesting blog post, may be read by tens of thousands of people, the result can cause nightmares to a company trying to manage its brand and control information flow for good reasons (for example, Apple limiting news of a new iPhone model to create a market splash).
  
  The most common reason I have seen corporate blogs die is that a single interesting post caused pain within the executive team, usually because of negative comments by readers (on the site and by other sites that pick up the discussion). Even after explaining that commenters that offer feedback are a tiny subset of readers, a single negative comment can create executive-level heartburn and kill a blog (usually by turning it into a boring, sanitized PR outlet). Now, imagine all the semi- or uncontrolled Tweets and other posts going out in the wild in the name of the organization (we are not talking about stealth posts or astroturfing efforts). Very, very few executives are willing to foster that type of free-for-all communication environment, and company boards, investors, stock analysts, and regulators will likely weigh in negatively on an open-posting policy. For those claiming information yearns to be free and that only dinosaurs horde content, don’t be surprised at layoffs and the ends of products as revenue and profits dry up when expert marketing takes a backseat to a Wild West show of Tweets and Wall postings.
  
• The competition gets easy intel. While similar to the previous point about uncontrolled information flow, it is important to point out that publishing even more company information with little control gives a much clearer public picture of your companies activities and plans – and it is all archived and searchable! You can be sure that just as you take advantage of all this new and easily accessible information on your competition, your competition will monitor the social networking activities of your employees and cull it for ways to improve their products, steal your customers, and tweak their sales pitches to lure prospects to their offerings. While many may feel that their company already guards too much information, it is clear that a robust social networking program can make it simple for a marketing peer working at your competition to build a SWOT analysis of your company and its products in just a few hours.
  
  In addition to the free intel issue, there’s also a danger related to staffing. Public exposure of your best employees means that the competition gets an easy way to perform basic targeting and analysis on individuals that are important to your company, facilitating the work of their HR department if they plan on poaching any of your top people.
  
• As a service succeeds, the noise increases. When any communication form is new, the value of the information created and disseminated usually exceeds the noise generated. But as a medium or specific service grows in popularity, the worthwhile content is diluted (real content takes the backset to funny or irrelevant posts) as the audience expands (your target market is no longer clearly defined). To be sure, there is still plenty of value to be found in even the most popular community sites, such as Slashdot, but users often have to manually sift through a huge pile of junk or rely on automated filters to uncover the few nuggets of wisdom. The biggest social networking services, as they increase in popularity, will likely become too large to deliver on what they initially enabled: A relatively small, targeted community of people who have common interests. Anything that gets too big simply results in the age-old problem that faces marketers: How to deliver an effective and actionable message to the masses? At that point, the returns of Tweeting will likely begin to mimic that of typical direct marketing efforts.
  
• Service popularity changes over time. In many ways, the use of a social networking service is like sitting at the popular table at high school or going to a hot club in your early 20s. When the table or club becomes known and accessible to the unwashed masses, the cool kids move on. For example, MySpace used to be the place to be for personal networking, but now Facebook has blown by its “ancient” competitor and dominates the personal social networking scene. Even business-centric sites like LinkedIn struggle in the face of newcomers who want or expect to do more than just business. With Twitter all the rage, other services and sites are adding Tweet-like capabilities. As core technology – such as short messages that can be easily syndicated – are enabled by all services, the individual advantages of now popular sites will decline. Sure, there is a network effect that makes being a member of a certain service increasingly rewarding, but there is also a negative network effect that will drive people away from these services, either because they are too crowded, are trying to please too broad an audience, or because the cool people just want to be unique again.
  
  For example, AOL used to be the king of providing the best online experience, but over time, alternatives were seen as more compelling, and AOL users eventually became seen as the hillbillies of the Net. Today, Facebook is attracting many older users. Will kids really want to hang out on a site that their mom loves? I would expect Facebook to suffer a loss of its original core users – those in college and high school – as it expands, with that group moving on to sites that cater to only them (until those sites need to expand, too, and the cycle repeats itself).

Don’t give in to simple, emotional criticismsIf you are unsure of whether to proceed – whether the effort expended is worth the expected return – then you should at least be prepared for the storm that will arise with your decision. The choice to avoid or limit social activities will generate criticism from within and possibly outside the business. The two most common responses received by those delivering anything negative in regards to fully embracing business-centric social networking are:

1. Those who fight the social network wave are marketing dinosaurs. This is the “he/she just doesn’t get it” argument. If you are a director or VP of marketing, the critics are essentially saying, “If you can’t lead, get out of the way.”
   
2. A rapid, free exchange of information is here to stay, so give in. This argument says that the information control genie is out of the bottle and that social networking opponents are fighting a losing battle anyway.

Neither of these reasons should overturn a rational decision to avoid or limit social networking activities and services (although they can be used in situations where social networking does make sense but is being ignored, as stated in the beginning of this article).

Pragmatism: Not just for dinosaurs
The reality is that those involved in marketing can’t do everything that they may want to do, whether investing in a large direct sales force, renting prospect databases, or dedicating resources to a company Twitter account. They have to make choices based on the resources they have – time, money, staff ability, etc. – and balance that with the expected impact of doing or not doing a certain activity. As a marketing VP at a software and services company recently said to me:

“Marketing distractions are plentiful. You need to start each day asking what your business needs to be successful – not how to stay ‘hip.’ Even after you identify a gap between what your organization needs and what it stands to gain by participating in new media channels, you still should proceed with caution.”

Now, some readers might say the caution espoused in that quote demonstrates that the executive is one of those marketing dinosaurs that will be run off by those that “get it.” But it’s important to think about the consequences of unwisely embracing social media:

• Spending money on the wrong activity. A dollar spent on an effective, well-managed business Facebook presence means that dollar is not being spent on another marketing initiative. Do you think that the return on assigning a staffer to actively manage and exploit that presence is worth it, given that you could have assigned that employee to another endeavor, such as maintaining an internal, up-to-date Salesapedia (a Wikipedia for your sales folks)?
  
• Looking foolish on a global scale. As an individual, you can probably afford to do stupid personal things on Facebook, but a business can’t afford a major gaffe when it comes to social media. The same mechanism that gets the “good word” out has the ability to get the “bad word” out. And there is always more interest in things that go wrong, in news of a company screwing up, so that negative information and all the commentary associated with it can create a much larger PR problem. And, as the Internet never forgets – thanks to Google caches, thousands of blogs, international media sites, etc. – screw-ups will be forever enshrined and available for future perusal by prospects and customers.

A checklist for moving forward
So, given the challenges with exploiting social media – due to the nature of the services as well as due to your own issues – it makes sense for businesses to be diligent and figure out specifically what they can do and what they hope to get in return for their social media investment. At the very least, you should be able to answer a variety of questions, such as:

• What is the specific goal of each social networking activity?
• Are there employees that can be effective at it? Do they have the time to do it?
• Is there a way to manage or at least audit activities?
• Is there a disaster plan for managing negative responses to posts, Tweets, etc.?
• Are there any metrics to tie the activities to hard returns (Web site visits, white paper downloads, prospect calls, etc.)?
• What is the contingency plan for when a popular social media author/poster leaves the company?
• What are the legal, regulatory, and other ramifications of this new form of communication?
• Who is your target market?

The wrap up: Don’t ignore, but don’t blindly march off the cliff
In the end, a key takeaway is that for software and hardware businesses, adopting social networking services has benefits, but so far it has not been proven that it will generate new sales. Yes, if you don't embrace it today, you may feel a bit like a dinosaur and be called something far worse, but that failed or stagnant blog project should be a warning. Some companies and company cultures are not good fits for Web 2.0 and other social networking services, and the yearnings and loud protests of proponents won't change that fact.

So, the answer to the initial questions is: Don’t ignore social media but don’t believe or fall for the hype. Outside of certain areas, such as PR and limited product feedback, it has not proven its value. Remember those press events in Second Life? They never did catch on. Social networking on a personal level is here to stay, but for businesses, the overall path is much less clear. Startups will milk these services for all they are worth to gain exposure, while established companies or those needing to grow their revenue will re-learn that not all exposure is a good thing or leads to orders.

If you make the case in your own organization, and the case is business-oriented and still compelling, than confidently go forth and Tweet and friend with confidence. Otherwise, experiment, watch, absorb your competitors’ content, and revisit the question next quarter and the one after that. You might find you were right, you might find you were wrong, but your business won’t be closing up shop either way. Jumping on the social networking bandwagon can be a positive and rewarding in some ways, but for most revenue-seeking companies, it is not currently about profit.