Social networks such as Facebook and MySpace are a double-edged sword. They provide us all with the chance to keep in touch with our friends and let people know what we’re up to by way of personal messages, friend updates and photos. But what if a potential employer uses this information against you? And what if that employer just happens to be President-elect Barack Obama?

Barack Obama is no stranger to either the Internet or social networks. In fact, there is one school of thought that suggests Obama owes his 2008 Presidential election win to the Internet thanks to his campaign using sites such as YouTube and Twitter to spread the message to ordinary voters.

Obama also has his own social network which started out in order to gain grassroots support but has now evolved to be a direct link to Obama’s Presidency, with people belonging to the network made to feel empowered by being part of something of that magnitude.

But Obama’s use of social networking and Web 2.0 sites is changing now that his focus has shifted from getting elected to running the country. He’s already dropped Twitter, and his White House team is now using Facebook and other Internet sites to vet potential applicants for his administration.

According to an article in The New York Times, a seven-page questionnaire is part of the application pack sent to all candidates for high-ranking or cabinet positions in the White House. There are reportedly 63 queries made in to each candidates personal life, including information about spouses and adult children.

But potentially the most interesting set of questions relates to a candidate’s presence on the Web. Every email and blog post that could potentially cause President Obama a problem in the future has to be detailed, as well as links to accounts on social networks such as Facebook. There is also a request for a list of all aliases, handles, or nicknames used on the Internet.

The White House is certainly not the first employer to use Facebook to check up on an employee but the wide breadth of information required means Obama and his team are leaving no stone unturned in trying to prevent hiring the wrong people for the administration. The only question really is whether this process delves a little too deeply in to what should really be people’s private lives?

Everything was going fine for the web — the financial world had been unwinding its overleveraged excesses for nearly a year without nary a ripple into Silicon Valley — until the launch of HoffSpace, a social network revolving around the oogachaka-ing, burger-wagging actor.

Some bloggers called it a bizarre nightmare. Others decried it as the end of social networks. They were probably joking. But they were right.

Hoffspace showed once and for all what the web sector had fought so hard to admit: These social networks had finally expanded a niche too far. No longer was it possible to argue that one day social networking sites would be anywhere near as good at making money as they were at expanding, fractal-like, into a grey goo of trivial matter.

Social networks spent too much time trying to build audiences without building a solid business model. The thinking was, let thousands of startups innovate in thousands of ways and one of them will stumble onto something big. The way eBay did with online auctions, or Google did with a better search engine.

But even the site voted most likely to succeed is still punting when it comes to financial success. Facebook CEO Mark Zuckerberg told a German paper this week that the site won’t have a business model for three years. “Growth is primary, revenue is secondary,” he said. On the face of it, that statement isn’t absurd. But coming last week, it sounded blindly out of touch. Facebook will surely survive, but smaller sites looking to it as a role model probably won’t.

This was the week when the Internet sector realized that not only are the good times over, but that much of the room we had for innovation is also gone. The time to experiment around with big, audacious ideas is passing. The invoice for that luxury is now due, and companies will have to either pay up or be so well-funded, like Facebook, that they can still afford tinker a bit. Money is what everyone is expecting from startups, simply because there is suddenly so much less of it around.

Of course, one thing that would help the sector would be if a major social networking company were to give enough of a peek into its books to show it has healthy cash flows, even a robust operating or net profit. But sites like Facebook and MySpace have been suspiciously shy about their financials so far, so that’s not likely to happen.

Many of these sites — focused on social networks or widgets or other mere embellishments to the web that emerged over the past few years — aren’t going to make it. Some with a smart focus, like LinkedIn, will muddle through. A few will be bought out cheap; others will live on as labors of love.

This is the destructive part of that celebrated and magical creative-destruction formula. A lot of areas in tech are probably going to find ways to keep growing, if more slowly: mobile advertising, perhaps, or cheaper, more efficient on-demand software.

The patented personal relationship management system offered in this Lot enables members of an online network to share and manage information among large groups of users. The system facilitates communication of select information between different members according to users’ individual preferences. Members of the online network may control which individuals may access any given piece of information they create and distribute, as well as what information may be presented to them by other users. “While online social networking sites have enabled people to establish and maintain multiple connections in a way not previously possible, other concerns arise as a result of the amount of information being made available as well as the growing number of users,” said Jason Hardebeck, Chief Executive Officer of WhoGlue, Inc. “Specifically, users will want much greater control over which individuals access their personal information and how it is shared with their contact network. In order to emulate the true nature of personal relationships and the various levels of trust between users, social networks must allow each user to fine-tune access to their profile data as they see fit. Ultimately, the online social networking sites that offer these privacy-management features will appeal to a much broader base of users.

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Many members of the so-called Web 2.0 generation of Internet companies, such as social-networking sites, blogs and other similar “social media,” have made little revenue, the Financial Times reported.Roger Lee, a partner at Battery Ventures, told the FT there is going to be a “shakeout” in the industry in the next year or two, with many Web 2.0 companies disappearing.
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Social networking sites need more regulation in order to ensure that they won’t pose major security risks to users, according to the European Network and Information Security Agency (ENISA). The agency issued a preliminary version of its General Report (PDF) covering online security this morning, pointing out that it views social networks as a “positive social phenomenon” that are not without their own set of security problems, and the organization has a set of recommendations meant to protect users online. ENISA said that some of the main threats identified so far through social networks involve digital dossiers, face recognition, and social engineering attacks on enterprises. Phishing attacks, reputation damage, ID theft, stalking, and cyberbullying are common as well. The organization says that, because of the human desire to connect and the growing popularity of social networks, it’s easy for users to let their guards down and not be aware of the size of the audience accessing their information. “Social Networking may be seen as a ‘digital cocktail party,’” read the report. “However, compared with a real-world cocktail party, [social networking service] members broadcast information much more widely and sometimes unadvisedly, either by choice or unwittingly.”

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