The cash value of social media

The great American philosopher William James coined the term cash value to describe the worth of an idea to an individual. Now BusinessWeek is reporting on research from MIT Sloan and IBM about what social connections are worth. This work is trying to assess the cash value of an idea -- social media -- to organizations and to individuals. (Their working paper is here.)

Some tidbits:

Among the group studied, several thousand consultants at IBM, those with strong links to a manager produced an average of $588 of revenue per month over the norm.

...leading tech companies, including IBM, Microsoft (MSFT), and Yahoo! (YHOO), are hiring economists, anthropologists, and other social scientists to map and classify new types of friendships—and put a value on them.

Researchers at IBM Research and MIT's Sloan School of Management found that the average e-mail contact was worth $948 in revenue. To unearth that and other data, they used mathematical formulas to analyze the e-mail traffic, address books, and buddy lists of 2,600 IBM consultants over the course of a year. (Their identities were shielded from researchers, who viewed them only as encrypted numbers, known as hash codes.) They compared the communication patterns with performance, as measured by billable hours.

There's so much more in this report. I encourage you to read it. If IBM and MIT are teaming up on a research project like this, my bet is that they're on to something.

How could your company profit -- really profit -- from these insights?