Social Networking to Hit $2.5 Billion by 2012

Small, innovative providers are the “new black” of social networking.

Although there are about 100 vendors offering some kind of solution, even more specialty offerings are hitting the market on a weekly basis, according to a new study.

“Last year, providers of corporate social software had revenues of about $277 million. We see revenue increasing by 72% to over $420 million by the end of this year,” says David Mallon, who analyzed the data in Enterprise Social Software 2009: Facts, Practical Analysis, Trends, and Provider Profiles.

The Bersin & Associates report says the use of social software is still in the early stages within most companies. Typically, most purchases are being made at the departmental and workgroup levels; fewer than 5% of organizations have an enterprise strategy for social networking.

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But when companies do use social networking, a lot is directed toward onboarding; recruiting; support of formal training; alumni and retiree relations; succession planning; customer communities for loyalty marketing and self-service; and corporate intranets.

The report notes that this market could reach $2.5 billion by 2012, and the space is characterized by innovation in collaboration, search and tagging, presence awareness, content management, mobile access, and integration with the consumer web.

The talent management research firm points out five current market leaders: Atlassian, Jive Software, LiveWorld, Mzinga, and Telligent.

Elaine Rigoli has nearly 15 years of experience managing content and community for various B2B and consumer websites. Elaine has written thousands of business and technology articles and has been quoted in The Wall Street Journal and eWeek, among other publications.

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