Some companies discourage their employees from using social networks at work, fearing lost productivity and wasted time. But the nation's fourth largest bank is getting ready to roll out one of its own.

Wachovia plans to introduce its social networking service to its 110,000 workers by early 2008. Like the popular Facebook service, the network will allow users to upload photos of themselves—not just corporate ID mug-shots, either—and personal information. Community-building across the vast company is one of the goals.

But the purpose of this network is all business, and the ambitions for it are grand. Think of it as a nervous system for the enterprise, one that gets more valuable the more it's used. Wachovia envisions a sophisticated knowledge-management platform integrated with multiple applications to let workers locate information— and the people who use it—simply and intuitively. Look up coworkers, and you can see their relationships to other employees and departments, and determine their availability at a given moment as well. Search for best practices on, say, a marketing or sales topic, and up come blogs and wikis written by informed employees, along with an in-house encyclopedia of all things Wachovia. "People will use it in ways we can't imagine," says Pete Fields, director of enterprise Web services for the e-commerce division of the Charlotte, N.C., bank.

Corporate social networks are looking very much like the Next Big Thing. The buzz around consumer sites like MySpace and Facebook, along with the popularity among business users of the cross-company contact directory LinkedIn, helped prepare the ground for these new enterprise nets, but their relevance goes way beyond hooking up like college kids or resume-swapping with someone you think you met once at a conference. The software lets people join and form online groups, list their interests and expertise, post text and pictures and all manner of data, communicate privately or openly with each other, and have all their postings tracked and analyzed and made visible on a single screen across an organization.

This is powerful stuff. The idea is that it will boost top and bottom lines by providing a clear understanding of who knows what, and who knows whom, within a company and among its business partners. Making it easy for people to get together online and off, and harnessing the energy and information unleashed in recent years by so-called Web 2.0 tools, is supposed to advance core business tasks including sales, marketing and knowledge management. Early adopters range from the U.S. intelligence community, which plans to launch a cross-agency social network in December, to major players in the pharmaceutical industry, where drug discovery is being driven by knowledge-sharing across companies, and presidential campaigns that count on social networks to raise money and motivate voters. Investors in companies contending for marketshare in the increasingly crowded field include Cisco and Netscape co-founder Marc Andreesen.

"Social networks improve the ability of people to do their work," says Burton Group analyst Mike Gotta, who expects social networking to be a proven contributor to corporate revenue growth, profitability and innovation within five years. The direct payoff is expected to come from making sales and other processes more efficient. The technology also allows for better employee relations and human capital management, Gotta says, appealing to younger workers and offering them access to mentors and training. Research from enterprise social-net vendor SelectMinds claims users are seeing quantitative and qualitative results in terms of new business generation, productivity, retention and branding.

It's enough to make anyone's hype-meter start to twitch. Quantifiable results are thin on the ground, and much of the expected payoff depends on intangibles such as relationships and culture that are hard to measure. But the sense that something big is happening is widespread. The rise of enterprise networks reflects current thinking about the ways companies function beyond the traditional organizational chart and the nature of interactions outside management hierarchies (see "Informal Organizations").

It says something about the flattening of business structures, and the Web-driven recognition that talent and expertise are often more widely distributed across groups than previously understood. But there is more to the story: "People are recognizing the value of relationships and understanding that the ability to see objects in context is more powerful than just linking to the objects themselves," says Eric Miller, president of knowledge management company Zepheira and a former head of the Semantic Web Initiative for the World Wide Web Consortium at Massachusetts Institute of Technology.

Tying together worker-generated applications like blogs and wikis, and allowing employees to map categories of information themselves, he says, "transforms the way enterprises share, collaborate and exchange knowledge, providing a huge competitive advantage. It will be a differentiator among businesses in the next three or four years."

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