As the online social networking phenomenon crosses over into the business realm, the (relatively) new medium carries the promise of accomplishing on the Web what cocktail-party schmoozing can do in person. That is, greasing the skids for deals to be struck and closed. Has that potential been realized? Slightly more than one-quarter— 28%—of you responding to last week's GlobeSt.com poll agreed that networking sites can help brokers and owners make deals, while 72% call online networking "overhyped." Jennifer Magee, founder and CEO of the real estate networking site Upworld.com, isn't flabbergasted by this response so early in the game.
"It doesn't surprise me that people think the social networks are a bit overhyped when it comes to closing specific transactions. Social networks are more about building relationships over the long term. They're an investment of time, much as you would invest time when building your contacts offline. You go to networking events in the hope of meeting people who potentially could introduce you to other people, which might lead to some business eventually happening. Social networks are very much like that.
"Social networks have been so hyped in the media that people expect them to be a one-stop solution. They expect to come on to a network and suddenly get a deal out of it. I don't think it works that way. It takes time, and you get as much out of it as you put back into it. A lot of people join these social networks and then are a little passive about it. They kind of expect deals to come to them and then when the deals don't come, they say, 'oh, it doesn't work.' And under those circumstances, that's true; it won't work.
"Social networks are in the very early stage. It's a whole new way of doing business. The people who are using it really actively are the younger generation, and a lot of them aren't in a position yet to do deal-making. They're in the beginning stages of their careers, and it's more for them to find mentors and find people who would hire them into new jobs, where they eventually move up and become decision-makers. Then I think you will see the social network have more value.
"People don't know what the rules are yet. It's the Wild West, and people are still trying to figure it out. If you don't know what the rules are, it's hard to understand that there's a linear path from point A to point B—in other words, once you come onto the site, what do you do to make a deal happen there? That path isn't clearly outlined or defined on most social networks.
"You have a lot of intensity of conversations on social networks; you've got a lot of people that are reaching out to each other. The key is when you use a social network to make a real connection, and then actually meet that person in-person, you're using the social network to tie back into real-world behavior. Social networking is very locally-based; a lot of the people you would contact are in your geographic area and you can arrange to meet with them in person.
"I think you'd get a different response to the question 12 to 18 months from now. The economy is definitely changing the way that people are looking for new business. People are more willing to experiment on the social networks and see what kind of value they can get out of them. And as the economy starts to come back in 12 to 18 months, more opportunities will be available, and when the projects and deals start coming through, they're going to happen through some of the relationships they started building on the social networks. The success story will come out of that."
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
