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Companies warm up to social networks

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"Authentic relationships are at the heart of both personal and business or professional life," says John Challenger, CEO of Challenger, Gray & Christmas, an outplacement firm. "Some companies are using [social networks] as great networks of current employees to enhance intra-company communication. It's a way of building stronger alumni networks with your employees who have left but are still in some ways part of the culture. And it's certainly a great way to reach out to potential customers."

As Mr. Challenger puts it, social networks are like a Rolodex squared. Businesses interact with customers on Facebook groups. Millions of businesspeople also make connections through professional social networks such as LinkedIn, Plaxo, and Ryze. One of LinkedIn's most popular features is its information booth, where users can pose business questions and share knowledge with others. "We're seeing a lot of small-business owners getting advice on how to build their businesses," says Krista Canfield, public relations manager for the Mountain View, Calif.-based company.

Moreover, recruiters are increasingly plugging into LinkedIn's pool of 25 million résumés to find new hires.

But before your office joins the rah-rah social-network parade, beware: Popular sites should be monitored for corporate security.

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