Until recently, Serena Software was known more for mainframes than social networking. The company has been in business for 27 years, and the average Serena employee is a well-seasoned 46-year-old programmer who codes mainframe software rather than sexy Web 2.0 projects.

But a company intranet established on Facebook is helping to change both employee and market perceptions of this stately, midsize tech company.

The Facebook intranet has yielded both tactical and strategic business benefits, according to the company. The vast majority of Serena's 800 employees work outside of its Silicon Valley headquarters in Redwood City, Calif. By establishing a Facebook group as its company intranet, Serena Software not only saved money but also demonstrated a commitment to its employees to improve the quality of workplace interaction.

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And there are intangible benefits, too: The move was a nod toward appealing to younger workers. "The type of people entering the workforce now won't work hard for you if they feel you're holding back info," says Kyle Arteaga, Serena's VP of corporate communications, who initially proposed establishing an intranet as a Facebook group. Embracing Facebook demonstrates to Serena employees that it's an open, networked organization, he adds. Facebook status updates allow co-workers to see at a glance what their connections are up to during the workday. "It creates relationships that wouldn't have existed if it wasn't for Facebook," he says.

Serena's culture has changed because of social networking. "In 2006 we had a CEO who banned instant messaging in this company," recalls Arteaga. "The culture has changed. The employees have new skills now -- they're networking -- and we encourage it."

Another pleasant surprise: "We get a lot of resumés on Facebook as well from college seniors," adds Arteaga.

While any organization could duplicate this move, intranet experts say few others have or should undertake it. "There are other tools that are secure, have more robust features, and Facebook is not designed for an intranet," cautions Jeremiah Owyang, senior analyst for social computing at Forrester Research. [January 2010 Update: Jeremiah Owyang is now a partner at Altimeter Group.]

Plus there are other ways of achieving the benefits of a company social network. Some companies adopt custom, private social networks called community platforms because they offer social networking functionality behind a company firewall. "A community platform is going to give you far more opportunities to change it, modify it, fix it, add and remove features that Facebook doesn't offer," says Owyang.

Although using Facebook doesn't cost Serena Software any money, Owyang insists that "security is far more important than free. You don't have full control over the security [on Facebook] -- there are too many risks."

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