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Heard on the Tweet

Consumers have embraced Twitter and other social networking sites, but is that reason enough for companies to follow suit?

Greater Expectations

Sprint created a separate handle for a six-member customer-care team that is active on Twitter. “There’s no extra budget allocated — it’s just something they monitor as part of their day,” says Rich Pesce, social media communications manager. Using a third-party tool called CoTweet (in beta testing), Pesce can assign tweets to a customer-care representative via an e-mail and also post tweets to multiple accounts at once.

Placing a customer-service team or person on Twitter creates expectations though — like near-immediate response times. After being unplugged from Twitter during a two-hour plane ride, Pesce turned on his Blackberry to find six tweets from an irate user. The last one: “That’s it, if no one is going to talk to me I’m switching.”

Loose Tweets Bring Heat

Most companies in early-phase adoption of Twitter are struggling with a more elemental problem: the groundswell of employees who want to tweet about work, a thorny issue in part because the line between work and personal life can be hard to draw.

Some companies, already stung by blowback from blog posts in which an employee slams a rival only to be revealed as anything but a disinterested party, are busy modifying communications policies and codes of conduct. Umpqua Bank created “social media leaders” in such groups as private banking and mortgage lending. Tweeting is limited to those employees and the customer-care team.

In general, however, most companies “haven’t gotten their arms around the risks,” says Chris Wolf, leader of the privacy and data-security practice group at Hogan & Hartson. An employer could be held liable for the actions of an employee communicating on a social media site, even if the time and place (and computer) is outside work, Wolf says. Defamation, illegal use of trademarked materials, violations of customer or employee privacy — the legal issues are the same as in the offline world.

IBM’s social-computing policy states several times that employees must post a disclaimer that the views expressed are not those of the company. “It could go an awful long way to avoiding a lawsuit,” says Wolf, “but it also depends on who [the Tweeter] is. If it’s the CFO, the disclaimer is not going to have much effect.”

Effective policies must clearly state who has authority to speak on behalf of the company, says David Cifrino, a lawyer with McDermott Will & Emery. That’s especially important for public companies subject to Regulation FD’s restrictions around disclosing material, nonpublic information. Cifrino suggests that there should be a compelling business reason for tweeting that outweighs the potential liability.

Companies are far from sure that tweeting is worth it. Even Twitter recognizes this. In June it unveiled a program to explain Twitter’s applicability to businesses. While Twitter was initially going to roll out commercial products this year, it may postpone those, given where companies are on the learning curve.

There’s also a crucial question about Twitter yet to be answered, according to Joe McCarthy, senior director of corporate communications at Cypress Semiconductor: Do your key customers use Twitter as a way to make decisions and gather information to support those decisions? CFOs would love to know. But that will be a lot harder to answer than, “What are you doing?”

Vincent Ryan is a senior editor at CFO.

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