Do you use Facebook? If you are over 40, the answer is maybe. If you are under 40, the answer is almost certainly yes. Did you know that Facebook was developed by a Harvard college student who wanted to create a website where people could rate how hot other Harvard students were? Half a billion dollars in venture capital later, it is the cornerstone of what has become known as social networking.

Do you use Facebook? If you are over 40, the answer is maybe. If you are under 40, the answer is almost certainly yes. Did you know that Facebook was developed by a Harvard college student who wanted to create a website where people could rate how hot other Harvard students were? Half a billion dollars in venture capital later, it is the cornerstone of what has become known as social networking.

Whether you are into social networking or not, there is no denying its popularity. As of February 2010, Facebook has more than 200 million active users. And Twitter recently reported that users are posting 50 million “tweets” a day. More and more companies are turning to social networking sites as a new means of advertising their products and services, especially to those tough-to-reach young people.

But while social networking sites offer companies the means to communicate directly with hundreds of millions of people, they also offer individuals the same power. Combine that with the higher degree of anonymity available to people operating on the Internet and individuals have an enormous ability to affect the fortunes and reputations of companies. And for contacting firms, which are so dependent on reputation, the risks can be severe. 

Richard D. Alaniz

What Toppings Would You Like With That?

The single greatest threat of social networking sites is the ability to quickly disseminate destructive information about the company to a huge number of people. It is easy to see how this could come from either employees or customers. The most famous example is a now infamous video from two now former employees of Domino’s Pizza. The employees took a video camera into their store kitchen and filmed themselves performing disgusting and unsanitary acts to food products which they then sold to actual customers. The video went “viral” overnight and was viewed hundreds of millions of times. Domino’s corporate executives later conservatively estimated that the video cost them 1 percent to 2 percent of their yearly sales - about $37 million dollars. All from two reckless employees who gained nothing other than brief notoriety.

For many companies this type of risk is not only employees, but also from clients. Consider the recent example of Southwest Airlines and film director Kevin Smith. Southwest removed Mr. Smith from a flight, due to, they claim, that he is too large to fit into one seat. Mr. Smith, who has more than 1.5 million Twitter followers, tweeted relentlessly, potentially causing Southwest embarrassment, time and potentially millions in revenue.

Such incidents are certainly among the most worrisome risks of Social Networking sites but they are by no means the only ones.

Fan Pages

The term “social networking” is itself misleading. Businesses have increasingly turned social networking sites into another medium of advertising space. These days, a new movie not only has a website (websites are soooo 1990s), it absolutely must have a Facebook page and Twitter blog. And just as businesses have begun to blur the lines between business and personal for these new media, employees have begun to do the same.

Of course, companies should ensure that all advertising meets appropriate standards, such as clarity and truthfulness. Unlike traditional advertising social media facilitates a different type of misleading advertising: the ability to hide where a comment came from. Companies should avoid creating posts, fan pages, or online presence that a reasonable person might infer is from a client. It is crucial that employees do not pretend to be otherwise.

No Way! I’m Off the Clock

As if the risks of social networking sites weren’t great enough, they pose a unique problem for employers. One of the biggest challenges for employers in the early days of the Internet - and maybe even still today - was the “slacker factor.” Employees could surf the web for hours - hours not spent being productive for the company. Recent developments in Internet monitoring and website blocking software have greatly reduced this problem for employers.

But social networking sites are different. They are different because the risks they pose can occur while an employee is “off the clock.” Employees can just as easily post disparaging comments about their company from the comfort of their living room as they can from their cubicle - even more easily if the company blocks access to social networking sites.

Such vulnerabilities make an outright ban on employee use of social networking sites impractical. Supervisors and employers must focus their efforts not on controlling access to these sites but on controlling the messages put out on them by their employees - and non-employees.

Furthermore, the physical act of social media may cause dangerous situations. Many people now text while they drive. While it seems patently foolish to check one’s Twitter feed from a rooftop, it certainly happens every day.

You Have the Right to Speak, Not the Right to Say Whatever You Want

The first step in insulating your company from Facebook and Twitter is developing a company social networking policy. The policy does two things. First, it tells your employees that you know all about Facebook and MySpace and that you take what happens on those sites seriously. Second, it gives your employees guidance on what is expected of them.

It’s unrealistic to tell your employees never to post anything about the company on their sites. Work is a huge part of life and it’s only natural that employees will want to talk about things that go on in the office along with lots of other things. This has been going on for years during the lunch hour and around the water cooler. Only now, it’s posted electronically in places where millions of people can read it.

What’s in a Good Policy?

• Don’t talk bad about the company. Start by reminding your employees that you are paying attention to what gets posted on MySpace and Twitter. That alone will deter many employees from making irresponsible comments. Give guidelines detailing what sorts of comments are prohibited. Don’t disparage the company. Don’t disparage the boss. Don’t reveal intimate details of the new advertising campaign or the world-beating new product the company is about to release.

• The Internet is forever. Remind your employees that what they post on the Internet lasts forever. Whatever they write will be available for viewing for all time. And not only will it always be viewable, everyone will always know that they posted it. Even on sites where it appears a person may post anonymously, their IP address is tracked by the Internet service provider. And that is discoverable if someone is determined enough.

• Designate a social networking team. Large enough companies should also consider putting together a “social media team.” One of the truest lessons of the information age is that the way in which information is transmitted changes quickly, while the response of legal and regulatory institutions is slow. A designated team can monitor changes in technology, stay on top of the latest sites and advise management of new developments. A good team should include representatives of the IT department, human resources, the legal department, and a few younger tech savvy employees - and meet on a regular basis.

Another key role for the social media team should be to monitor the company’s reputation on the web. Setting up a “Google alert,” for example, will help alert the company early when something is being said about it. Team members should also conduct regular checks of YouTube, MySpace, and other popular social media sites for any mention of the company. Who knows, you might even find something positive being said that you may want to publish to a wider audience.

• Have your own online presence. One of the first things Domino’s did when its employees released that video was to release a response on its own sites. Southwest did the same thing - on their blog. These responses allowed the companies to get their own message out there early in the news cycle.

A well-designed social networking site can also serve as an excellent recruiting or marketing tool. If the company needs to get a message out - say announcing a temporary facility closure due to inclement weather - posting the message on a company Facebook page or Twitter feed will reach a lot of employees.

Before launching a site, consider what your peers are doing and how to develop a site that is helpful but not intrusive. Social networking sites are generally free, but someone who is tech-savvy should be specifically designated to oversee the site on a regular basis. A badly managed presence may be worse than none at all.

The Web 2.0

The only thing Web 2.0 really means is that there is going to be a Web 3.0. And no one really knows what that will be, either. As the ability to transmit information becomes faster and more personal, companies must develop flexibility to respond to both the challenges and opportunities of information technology. A company prepared for today is outdated tomorrow.

Richard D. Alaniz is senior partner at Alaniz and Schraeder, a national labor and employment firm based in Houston. He has been at the forefront of labor and employment law for more than 30 years, including stints with the U.S. Department of Labor and the National Labor Relations Board.

He can be reached at 281-833-2200 or