Inside Facebook

It was just last week that Facebook opened its doors outside university and high school walls for the first time to employees at a select 10 companies. Today, Facebook significantly expanded corporate availability to anyone with an email address at one of hundreds of top companies, including the likes of Google, Yahoo, Oracle and Wachovia.

(Update: Full list of 878 companies)

“We’ve expanded to include work networks to meet the needs of Facebook’s growing alumni user base,” said Melanie Dietch, Facebook’s Director of Marketing, when asked to explain the company’s corporate-network strategy. “We know that two-thirds of users return every day to Facebook, and 45% of alumni come back every day. So to meet the needs of alumni who want to continue to use Facebook after school, we’ve enabled them to invite friends from work to join.”

The blogosphere was abuzz last week after Facebook’s initial foray in the corporate market. However, the company says it does not intend to compete with existing professional networking and recruiting services like LinkedIn. Dietch says Facebook has “no plans” to launch any special features for mining work networks on the site.

LinkedIn upgrades classmate search

Just recently, LinkedIn launched a new feature allowing members to easily search by class year in order to find and re-connect with old classmates. But LinkedIn Co-founder and VP of Marketing Konstantin Guericke says his company intends to continue focusing on serving the professional functions of job-seekers, recruiters, and analysts.

“There clearly is some socializing going on at companies, and Facebook is the natural solution for that,” Guericke said in an interview. “[But] my guess is that 99% of the people you’d want to get in touch with on LinkedIn never had a Facebook account.”

“Fun is good! … [But] I’m not sure how many people will feel their Facebook profile is ready to be used for job search or business deals,” he added.

“Is my boss checking out my party pictures?”

The presence of professionals inside Facebook raises some new privacy questions. Students regularly post photos to their profile pages and write comments on each other’s walls–not exactly the things they’d put on a resume. “Many students don’t relish the thought that future employers might check out their Facebook profile,” said LinkedIn’s Guericke.

To address these concerns, Dietch says Facebook’s strict privacy rules will apply to corporate members just as they have to high schoolers. Professionals who join the service “will only see the profile information for their network and their friends. And of course people can tightly control their privacy settings to restrict their information if they choose.”

Clearly the addition of work friends to a historically personal social venue introduces new possibilities for social awkwardness on Facebook. Do you want everyone at your company to be able to see photos from your weekend vacation? Do you want that sketchy character in the cubicle around the corner monitoring your relationship status? Until Facebook provides members with different and easy to use privacy settings for work and personal networks, many current Facebook members may shun joining work networks (thereby potentially giving coworkers a clear window into their personal lives).

That being said, Facebook will surely cost employers thousands of hours of lost productivity I wouldn’t be surprised to hear of Fortune 500 companies blocking Facebook access within the next 6 months.

Alumni networking getting crowded

Facebook’s entry into the broader professional networking market raises eyebrows for makers of alumni networking software like Mountain View startup Affinity Engines’ inCircle and LinkedIn’s LinkedIn for Groups. Both LinkedIn and Affinity Engines sell packages that are integrated with university alumni association websites to allow former students to hunt for jobs and find old friends. While it is unlikely that Facebook would enter this business directly, its growing popularity makes the need for proprietary alumni networking software obsolete for many.

“We provide users with trusted social networks by partnering with large organizations to verify the user’s identity and membership in that organization,” said Steve Loughlin, President and CEO of Affinity Engines. “The big question [for sites like Facebook is] sustainability because switching costs are low.”

“If Facebook attempted to sell mini-Facebooks to alumni associations or to get job listings from employers, there would be some competition,” said Guericke, whose company’s products are used by universities like UC Berkeley, Duke, and UCLA. “But I think competition is healthy.”