Though it is within this space between the black and white that the accounting for social media occurs. As more and more companies look towards social media as a valid form of branding, marketing and development the question of ROI for such activities is being asked. So how do companies make the financial case for social media when so much of social media cannot be financially accounted for.

Beth Kanter has a great post entitled, Should You Quantify Love? Redux 2, that addresses a layer of this unique challenge.

I am just back from Legal Services Corporation and a keynote on ROI and Nonprofits. Stephen Downes pointed to a post by Jay Cross called “The Income Statement It Isn’t”

Jay Cross is exactly right. “It never ceases to amaze me how many people assess the cost and benefit of projects with accounting approaches developed in Venice in the five hundred years ago.” And, of course, such metrics are useless. “Organizations that make decisions based solely on things that are sufficiently tangible to be counted might as well consult a Ouija board to set their goals.”

In my keynote, I spoke about the importance of intangibles for a couple of reasons.

1.) Intangibles often come in the form of stories or anecdotes about the technology value and if used along with numbers can help make the case.

2.) The discussion around trying to quantify it – can lead to productive conversation about why the technology is important to mission. If the conversations focuses on the results, not the measurement unit.

I tried to make the point by raising the question, “Can you quantify the intangible?” Of course you can’t. But intangibles are important to note and often inform decisions.

The notion of intangibles in accounting seems almost contradictory, but as Beth states “intangibles are important to note and often inform decisions.” It’s critical to assess all the moving pieces, determine the risk associated with each and assemble a strategy that takes everything into account – not just the numbers, but intangibles and their impact on solidifying the desired outcome.

So then the other question is how does one begins to determine what activities would be valuable to the strategic picture – and therefore be leveraged to make a compelling case for resources, support and implementation. Nick Stamoulis’s post entitled, Social Networking: Are You Measuring ROI?, offers some valuable insight.

When it comes to social networking, there are a myriad of activities that involve time. Some of those activities may translate into additional business for your company, but many do not. For instance, finding and approving friends could lead to earned income if one of those friends becomes a customer, but how often does that happen?

One of the many challenges for full adoption of social media into corporations and other institutions is going to be this ambiguity of financial return. Companies are striving to attain their desired bottom-line and decisions are based on the numbers. This isn’t a new concept and has been driven into me throughout my academic and professional life.

But social media offers creative, sustainable solutions that live beyond such stringent monetary boundaries. Social media is valuable. That much has been established, but what makes it a compelling strategic direction is that the impact is not only on an organization’s bottom-line, but rather cultivates strength via relationships, confidence and loyalty – establishing a presence within a global context with an infinite reach.

Two consumer advocacy groups have asked the FTC to investigate whether new MySpace and Facebook advertising programs violate consumer privacy.

Two consumer advocacy groups have asked the Federal Trade Commission to investigate whether new advertising initiatives announced last week by social networking sites MySpace and Facebook adequately protect consumer privacy.

In a Nov. 12 letter to FTC Chairman Deborah Platt Majoras, the Center for Digital Democracy and the U.S. Public Interest Research Group claimed that the “ambitious new targeted advertising schemes” launched by MySpace.com and Facebook Inc. “make clear the advertising industry’s intentions to move full-speed ahead without regard to ensuring consumers are protected.”

Caroline McCarthy also comments on Facebook’s social advertising initiative in her post entitled, “Legally, are Facebook’s social ads kosher?”

Social Ads, which have already begun to appear on the site, are designed to boost Facebook’s lukewarm revenues by targeting ads directly toward the members in question. They allow Facebook members to sign up as “fans” of an advertiser and then have their names and profile photos displayed alongside the marketer’s ads on their friends’ Facebook pages. Problem is, that potentially violates a New York privacy law that protects peoples’ names and likenesses from being used without written permission, according to McGeveran.

Check out the Center for Digital Democracy and the Electronic Frontier Foundation to learn more about free speech, privacy and other issues impacting you on the web.

Excerpt from Read/WriteWeb entitled – OpenSocial: Three Big Concerns

OpenSocial is a hugely ambitious project that would tie together Google, MySpace and numerous other social networking platforms in a common environment that application publishers could publish widgets to with one set of code.There are some issues that need to be discussed about OpenSocial, however. It’s not all a bed of roses, believe it or not.

More buzz via Wired: “Google Aims to Break Open the Closed World of Social Networking” & PC Magazine: “Will OpenSocial Open Wallets for Google?“

THE BLEEDING EDGE

For as far back as I can remember, I was intrigued by edges. It was always a love-hate relationship. A certain amount of healthy fear of heights kept me a safe distance from the most daunting cliffs, but I couldn’t help but wonder what was on the other side of a given edge. As I began my career as a researcher, I couldn’t help but chase after the carrots presented by the bleeding edges of technology.

Having grown up online and began my career as a computer scientist, I’ve always had a healthy skepticism of new technology and found joy in unpacking reality from hype. Nothing gives me more pleasure than understanding the differences between how a technology is conceptualized by its creators versus its users. I love weaving in and out and between circles of developers and users. But this position destroys the magic of supposed bleeding edge. The blood of venture capitalists and the edge manifested as media hype are not nearly as delectable as I had originally imagined. Yet, realizing that the bleeding edge is nothing more than a Neal Stephenson-esque dream gave me the perspective I needed to really focus on people and their interactions using mediating technologies.

My predilection or shall we say my compulsion to shatter utopic mirrors has prompted and shaped many of my research projects. I’ve tried numerous methodologies to help make sense of the interplay of people and technology. I began by building psych experiments to understand depth perception prioritization in order to show that 3D immersive virtual reality systems have hormone-based biases. I built interactive visualizations of social data to highlight how we all hold more data about each other than we realize. Lately, I’ve been obsessed with trying to make sense of how networked publics are incorporated into the lives of American teenagers. To get at this question, I embarked on a two year ethnographic study of how American youth are using social technologies as a part of their practices of everyday life. The easy way to say this is that I’ve been studying MySpace (read more).

This is potentially a very big deal as the focal point of this investment is the online marketing/advertising potential of Facebook.

The Wall Street Journal reported that:

The software giant is gambling that the online advertising boom will continue and the popular social networking site will be among the biggest beneficiaries.

[In addition] Microsoft and Facebook say that the valuation is justified and that Facebook is starting to find ways to monetize its rapidly growing user base.

Facebook presents a big opportunity for online advertising, in part because it collects detailed information about its users — such as their hobbies, favorite music, location, age, and gender — that can be used to place highly targeted ads.

The cash injection from Microsoft will give Facebook funds to invest in new services, buy equipment, make acquisitions and hire engineers.

Facebook in coming weeks plans to unveil a new advertising system that will let advertisers visit an automated Web site to place targeted ads on Facebook and elsewhere on the Web, say people familiar with the matter.

Read WSJ full article.

Could this venture be the demise of Facebook? The never-ending plethora of ads on MySpace has resulted in the migration of individuals to Facebook. Could Facebook be subject to the same fate as MySpace? And if so, then what’s next for MySpace, Facebook and social networking?

Here are a few that piqued my interest (perhaps they’ll spark yours):

Web 2.0 Summit: U.S. Becoming Less Relevant In Global, Internet Economy

In terms of the Internet — especially in technologies key to Web 2.0 success — the fastest growth is in non-U.S. markets. For example, Germany leads the e-commerce market, China leads in online gaming, South Korea leads in broadband, Japan leads in mobile payments, the United Kingdom leads in online advertising, Brazil and South Korea lead in social networking, and the Philippines leads in micro-transactions via SMS.

MySpace, Facebook bantering at Web 2.0 conference
via CNET News.com’s Caroline McCarthy

MySpace CEO Chris DeWolfe and News Corp. chairman Rupert Murdoch took the stage at Web 2.0 and confirmed that the company is working on a platform that will launch “within a couple of months.” But when no date’s given, expect delays: considering how long we ultimately waited for Windows Vista (and now, Apple’s OS X Leopard) this could mean the MySpace platform is even further off than we think. And the company did say that it won’t be open to all users immediately, with a “sandbox” of one or two million beta testers preceding its full launch.

And no doubt there will be much more to come as the spin-off of the O’Reilly & CMP Web 2.0 Summit – Web 2.0 Expo Berlin – is taking place this November to “meet the increasing demand for Web 2.0 comprehension and skills, and to build a broader European Web 2.0 community”.