Wall Street Journal on Investors' and Entrepreneurs' Use of Networking Sites

Major media is catching on that real business is being done via social networking sites. According to last week’s Wall Street Journal (subscription):

Making new business contacts is the third-most-popular feature of online networks — after contacting friends and looking for jobs — says Nate Elliott, an analyst at Jupiter Research, a unit of Jupitermedia Corp. of Darien, Conn. A total of 15% of all online users are interested in using networks to make business contacts, Jupiter’s research shows.

Using Ryze.com, a business networking site run by Ryze Ltd. of San Francisco, is “like going to a business networking party,” says Steve Vachani, managing partner of Serendipity Ventures LLC, a seed-stage venture-capital firm also based in San Francisco. “I’ve been contacted by many people for investments and partnerships through Ryze.”

The story features several success stories, mostly from LinkedIn, which now boasts 15,000 venture capitalists as members.

The article also featured a brief quote from yours truly:

A networking site is “not an electronic deal broker,” adds Scott Allen, Austin, Texas-based co-founder of the Web site TheVirtualHandshake.com, a guide to online networking. “It takes being engaged and being aware. It’s still networking.”

One piece of advice that I don’t completely agree with was this:

Similarly, it may not pay to join too many networks. “By the time you are on two or three sites, you’re too busy to be active on any others,” says InnerSell’s Mr. Elias.

I agree that you may not have time to be active on a very large number of networks, but there really is substantial benefit to being a passive member. These networks are still, generally, far more effective ways of finding people than a general web search engine, and there’s tremendous value just in being able to find people and be found. It takes minimal effort to set up your profile in a site. I recommend doing at least that in as many as possible. Low cost, high potential value.