Pros and Cons for businesses building on Facebook or Ning

Bruce WilsonYesterday David Spinks and I exchanged blog posts and comments inspired by his post about 6 ways businesses are using Ning as a social network provider for their online communities.

In my post I hinted that a private label / white label social network might be a better choice for a business-0riented online community than a Ning network, even with beautiful customization. And by extension this reasoning could apply to Facebook business pages and applications and other social network providers. In his comment to my post David asked, in part, “Seeing as how Ning is so popular, couldn’t it … be an advantage to have access to their userbase?”

First the pros: businesses can certainly benefit from partnering with a strong social networking brand like Ning or Facebook. This is especially true of Facebook which has extremely high levels of adoption and trust and vast numbers of regular users.

  • When people recognize a trusted network partner they may be more likely to join.
  • Because more people are already participating in the larger network new arrivals are more likely to find friends to interact with.
  • When people are already logging in to Ning, or Facebook, or another service every day or so, its just super easy for them to join, then regularly participate in, new pages or communities.
  • I’m a big fan of the SaaS (“software as a service”) model wherein both writing and hosting of web software is handed over to people who’s job it is to perfect the user interface, maintain security, and keep everything running as smoothly as possible, 24 x 7 x 365. Then the business’s official job is just to administer the site, while the community does it’s thing by populating the network with their interactions.

The cons in my mind are a bit darker and more old-school corporate sounding. The hard question is: who “owns” the relationship from the business side? This has implications for both customer satisfaction, as in “who is responsible for (owns) making sure that the customer experience is positive?” It also has implications for revenue, as in “who benefits from (owns) revenue generated via sales and advertising?”

On the relationship side I can imagine a number of potential problems.

  • User experience: what if a network provider suddenly limits or eliminates a popular feature, as Facebook periodically does, or regularly fails to keep the service up and running, as Twitter is somewhat infamous for?
  • Branding: what if the social network partner is embroiled in a scandal, as Facebook was recently, or starts promoting a competitor of the business through advertising or integrated partnership?
  • Data portability: what if the networking partner goes out of business or is purchased by a competitor?

On the revenue side, a social network partner may restrict access to customer data in ways that a business feels prevents them from generating legitimate new revenue opportunities. For example, Facebook restricts businesses’ ability to hold contests and send event invitations. Or a network partner may superimpose its own revenue opportunities over a business’s own interest, as when Facebook ads and other UI elements draw users away from a business’s own messages and calls to action.

But there are many people who know the world-wide Ning community much better than I do. Do you think the benefit of a Ning partnership usually outweighs the potential downside?

I’m also not all that familiar with the white label / private label alternatives (some of which I mentioned yesterday). Do these overcome, or fall victim to, the same potential pitfalls?

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