Social Media as a Tool for Corporate Investigators

May 24, 2013 0 Comments Bloggies by Graham Penrose

Increasingly, corporations are hiring investigators to trawl social-media sites for intelligence about competitors and to watch for insider leaks, product complaints and evidence of employee misconduct. Investigators still use the old-fashioned ways -- snapping photos, global positioning devices, tunneling through criminal files. But today's corporate sleuths spend more time mining the mass of information people put online about themselves. Private-equity firms and hedge funds regularly hire externals as part of the process of due diligence before they plow hundreds of thousands or millions of dollars into a company. They want to make sure the management team is clean and who they say they are. More than 82 percent of companies use social media to find out information about their competitors, according to a Forrester Research survey in 2011 of more than 150 companies.

Corporate investigators use social media to look for illegal activity, undisclosed business interests and resume puffing. For one client who needed help collecting money from a businessman who pleaded poverty, social media showed the businessman was hiding assets. The businessman's son posted comments on about hanging out at his dad's place in the Bahamas, with photos of the property. Based on these comments the asset search was extended to the Caribbean. The hazards of an accidental online disclosure also tripped up Hewlett-Packard Co. when a vice president mentioned the computer maker's new web-storage initiative on his LinkedIn profile. Business rivals got a look at previously secret details of the company's cloud-computing services.

Kroll Inc., an international firm, has a reputation as Wall Street's private eye because of the agency's corporate intelligence work. Social media is a tool that only gets better as it gets more robust, said Peter Turecek, Kroll's senior managing director of business intelligence and investigations. Kroll builds profiles of executives in prospective deals, "where we hope the person is good and angelic," Turecek said. Fraud investigations look at the modus operandi of suspects. Have they done this before? How did they do it? Who in their network may be in on it. When one client asked Kroll to investigate an intellectual-property breach, the company used photos posted on Twitter -- shot from the rooftop of a New York City building -- to determine the address of the suspect's apartment. In another investigation, Kroll used LinkedIn and Facebook to establish connections between a vendor and an employee who may have embezzled company money. "Not too long ago it was very difficult to try to ascertain who someone's network or associates were without doing a lot of data mining and even surveillance, which is fairly labor intensive and therefore costly," Turecek said.

By blending information from Google, Facebook, Twitter and geolocation sites FourSquare and Gowalla, corporate investigators have identified which clients a competitor's salespeople spoke with and what potential deals were occurring. It would have been quite possible to phone the clients and confirm the hunches -- and possibly disrupt ongoing negotiations if contracts weren't signed. That's why many consider such tactics unethical. Most corporates use this data as an experiment and the data is meant to be used as a cautionary lesson to their employees about posting sensitive information online.

As the effect of social media becomes more intense, companies have begun monitoring what's being said about them online -- and trying to manage their Internet footprint. In a warren of cubicles at SP Data's U.S. headquarters in Tower City, many of the office's 225 employees track what is being said about SP Data's customers on social media, blogs and opinion sites. Online chatter about a company or its products that is positive might prompt an SP Data employee to re-Tweet the comment or respond to the writer with a thank you. When the sentiment is negative, the poster might get a response through the same online site, or by phone or email. "Only 5 percent of posts ever made about a company are responded to," said Daniel Bemis, president of SP Data. "It should be commonplace." Inc., based in Redwood City, Calif., helps businesses promote themselves on the web. Chief Executive Michael Fertick advises businesses to start by understanding how they're perceived online. Does 50 Likes on Facebook mean anything? Does the fact that people are mentioning you once a week on Twitter mean anything? How does that compare with other businesses in your field? says there's a way to put the Internet genie back in the bottle: Once a company has a handle on its image, it can start to manage it. The firm has made "millions of observations" about the secret rules of Google, Fertick said, to figure out how to shuffle postings about a company to put it in the best light. As for web monitoring for competitive business intelligence, Fertik figures it's in its infancy. A single Fortune 500 business might be mentioned dozens or hundreds of times a day online -- a mountain of traffic to analyze. So is designing software that understands human language enough to sift for positive and negative sentiment. The computer analytics are daunting. "We've worked on it for 4½ years," Fertik said.

But when it comes to human investigators sniffing the Internet for specific companies or employees, the hunt for fertile tidbits is in full swing.