Corporate Social Networking Startups Attract VC Funding - InformationWeek

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Software // Enterprise Applications

Corporate Social Networking Startups Attract VC Funding

The latest to get funded is SelectMinds, which offers business controls not found on Facebook.

Is the corporate world ready for Web 2.0-style social networking? Venture capitalists seem to think so, having recently poured millions into two startups in that area, SelectMinds and Connectbeam.

SelectMinds said Tuesday it raised $5.5 million from Bessemer Venture Partners in its first round of financing. The company formed seven years ago as a developer of online alumni programs, but is trying to push its business into more types of social networking platforms for customers.

SelectMinds pitches itself as a corporate social network that can give business and IT managers a bit more control over how employees connect on the Web, compared with something like Facebook. SelectMinds programs "remove all the risks by connecting groups of approved professionals privately and securely," the company touts on its Web site. The networks are designed to let business professionals exchange information such as business leads, job candidate referrals, and new product ideas, or develop networks for groups of people with similar interests and concerns, such as women. Participants in a network complete a profile and can search directories for friends, former colleagues, or other people of interest.

Dow Chemical will launch a social networking project in December based on the company's technology, according to SelectMinds. Called Dow Connect, it will let former and current employees communicate about jobs and contract openings at Dow. SelectMinds has built social networks for JPMorgan Chase, Lockheed Martin, Ernst & Young, and others.

Last month, Connectbeam, formed last year, raised $3.5 million in its first series of VC funding from Gabriel Venture Partners and Startup Capital Ventures. Procter & Gamble is in the process of launching a social network intended to make it easier to find people with needed expertise within the company, and it's testing Connectbeam as part of that network.

Connectbeam lets employees share bookmarks and tag articles, pages, and documents with descriptive words. At Procter & Gamble, when an employee searches for something using the Google appliance, Connectbeam results -- related tags and bookmarks -- are returned alongside the Google results. Connectbeam also lets people set up profiles and create online groups of people with similar interests.

Still, while SelectMinds and Connectbeam can serve as valuable business tools, they're not likely to stop employees from pursuing other social networking sites that aren't controlled by the company, are unrelated to work, and sit outside the company firewall.

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