Its trouble began after an individual posted instructions on a Web site showing how the company's sleek but seemingly indestructible Kryptonite bicycle lock with a Bic pen. The story gradually spread over the Internet as bloggers wrote about the fatal flaw and provided links to the Web site. Within five days, the bloggers' details were picked up by mainstream media outlets such as The New York Times.
Ingersoll-Rand could have limited the damage to its brand if it had used a service to track its reputation on the Web, says David Sifry, chief executive officer of Technorati, a blog tracking and search company based in San Francisco. Instead, the manufacturer was clueless for days that its Kryptonite locks were under digital assault and had to offer a lock exchange program that it estimated at the time would cost it $10 million.
The company has learned its lesson. "Since the Kryptonite situation, we have established a person in a communications role within the communications department who is responsible for monitoring major blogs out there with respect to Kryptonite," explains a company press official at its Montvale, N.J., headquarters. She adds that the company is also looking to find out more about how to.
Ingersoll-Rand isn't alone in seeking to understand the hidden power of so-called social media services such as social networks, wikis and blogs. Most tech and nontech companies alike are equally clueless to the long-term implications of this new tech sector. But they'll need to get smart quick.
"I honestly believe social media software will become an alternative to broadcast e-mail and an established slot in the IT infrastructure in the next five years," says Greg Lloyd, president and co-founder of Traction Software, a social networking software provider that is backed by the CIA's In-Q-Tel venture capital fund. "It will be ubiquitous. It will be the way you work."
Hypercompetitiveness across services and industrial landscapes worldwide is already compelling companies to embrace these new social media technologies, with Big Media companies such as Knight Ridder, leading the way. But how companies further afield employ these new tools will very much depend on how social media application developers and an exceedingly diverse customer base jointly develop new products and services over the next few years.
Start-up and at 'em
Right now the social media marketplace is dominated by a clutch of startups. San Mateo, Calif.-based Socialtext and San Francisco-based JotSpot, for example, are developing applications around wikis, which are online with lightweight content management features. Corporations such as Finnish mobile phone giant Nokia and Burbank, Calif.'s Walt Disney are now trying the startups' wikis to manage projects and for basic content management.
Other startups, such as Providence, R.I.-based Traction Software and San Francisco-based Six Apart, are building applications around blogs, those explosively popular Web diaries presented in reverse chronological order that contain links to other Web pages and pictures. Companies in Silicon Valley as diverse as weighty Sun Microsystems and small public relations firm Eastwick Communications are using them for communicating with customers, self-publishing platforms, information sharing and creating internal company logs or bulletin boards.
Social networks--in which large groups of people with a common personal and professional interest are pooled to find connections and share knowledge with the people who need it most--are gaining even more traction on the back of new applications providers such as aQuantive and Cloudmark, both of Seattle. "I see a big opportunity