Incorporating Web 2.0 social networking concepts into enterprises offers great benefits but also challenges, implementers of these technologies, including Best Buy, Serena Software, and Oracle, said Tuesday evening during an industry event in Silicon Valley.

Social networking in the enterprise, also referred to as Enterprise 2.0, increases collaboration and idea sharing amongst employees as well as customers and can even lower employee turnover, panelists said at a Churchill Club presentation entitled, "From Dilbert to Dude: Succeeding with Web 2.0 Within the Enterprise," given in Santa Clara, Calif.

But implementers also may need to be concerned with risks such as legal issues that could arise and what to do if inappropriate material gets posted on a social networking site, according to the panel.

Best Buy has set up a social networking site for employees called blueshirtnation.com, which has attracted 20,000 users, said Steve Bendt, Best Buy senior manager for social technology. Persons can participate in activities such as using audio files or blogging.

The impact has been "pretty huge," enabling the company to listen to and better understand employees, he said. Barriers are being broken down.

"It was about giving up control right away," Bendt said. "Now, they have the means to connect with people they've never met before," such as a store in Las Vegas talking to a store in North Carolina.

An employee can put an idea on the site and get funding for their idea anywhere in the company. The site does not challenge the hierarchy but complements it, Bendt said.

Turnover appears to have been impacted as well as employee morale. The overall turnover rate at the company is 60 percent while turnover of people using the site is just 8 to 12 percent. The site itself has not required a lot of investment and leverages open source software. Currently, the site is restricted to employees only and customers are not able to access it.

Serena Software has taken a different approach to social networking, conducting its collaboration on Facebook. While seeking a better way for communication than the company's intranet, the company pondered rebuilding it but instead looked toward "millenials," the 20-something people and how they communicate, said Rene Bonvanie, a senior vice president at Serena.

Serena officials made Facebook the new corporate intranet, resulting in improved communications. Employees speak with each other and with customers more openly Customers know where to find representatives and technologists.

"Through Facebook, they can find where people are," Bonvanie said.