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By Jessica Twentyman

Published: January 27 2009 16:52 | Last updated: January 27 2009 16:52

At each stage in its extraordinary development, the internet has encountered scepticism and resistance in boardrooms. Alarms have greeted each internet-based technology: would it distract employees or, worse, create unacceptable risks?

Over time, internet tools have been accommodated and have delivered huge benefits. But the same questions are now being asked about the latest generation of internet technologies, such as social networking tools.

Much attention has been lavished on the poster children of the Web 2.0 phenomenon – Facebook, YouTube, Twitter and the like – but for many business leaders, such consumer-led innovations seem frivolous, and have little to do with developing new products, increasing market share or streamlining clunky business processes. Some ban Web 2.0 tools.

They need to be aware, however, that a quiet revolution is taking place. That’s the message from Soumitra Dutta and Matthew Fraser, academics at the Insead business school in France and authors of Throwing Sheep in the Boardroom.

They detail how companies, including General Electric, Procter & Gamble, Shell and Airbus, are busy integrating social networking into their corporate strategies. These companies, say the authors, are showing that the use of blogs, wikis, widgets and other Web 2.0 tools “encourages horizontal collaboration and harnesses the power of collective intelligence to boost productivity, foster innovation and create enhanced value”.

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