Sermo in the Blogsphere

Sermo’s twist on social networking

Rough Type

October 14, 2007

Sermo, the rapidly growing social network for doctors, gets a shot in the arm Monday when it announces a partnership with drug giant Pfizer. Sermo is one of the more interesting commercial implementations of the social networking concept. The doctors who join the service — and more that 30,000 have already signed up — use it to discuss diagnoses and treatments with their peers. The site makes money not through advertising — which it believes would be anathema to physicians — but by letting paying clients like investment firms and drug companies “listen in” on the doctors’ conversations. As an incentive to its members, the site pays doctors $100 for highly rated postings.

For Pfizer, Sermo offers the potential for a new and relatively cheap means to learn from and influence the doctors who prescribe its pharmaceuticals. Reports the Wall Street Journal:

Facing financial pressures as some of its best—selling products lose patent protection, Pfizer is looking for more—efficient ways to reach the doctors who prescribe its medicines. Pfizer—affiliated doctors will be able to talk candidly with [Sermo’s] members, potentially giving the company insights into prescribing patterns and a way to show doctors data on its drugs.

It’s also a risky move, the Journal notes, both for Pfizer and for Sermo. The partnership will likely be scrutinized by regulators and politicians, and it may raise the hackles of doctors who “are wary of undue industry influence on their profession.” As a broker of sensitive information, Sermo has to tread a very fine line between the interests of its members and those of its clients.

Nevertheless, it’s interesting to think about the broader implications. Sermo’s early success is sure to focus attention on a business model that may become increasingly popular as social networks are established for professionals and other specialized groups. In the Sermo model, what the operator of a social network sells is not the eyeballs of its members but their ideas, observations, and conversations. In the long run, it’s not inconceivable to think that social networks’ privileged ability to harvest valuable information may be their most lucrative asset. If that’s the case, closed, exclusive networks may turn out to be more valuable than open ones — both for their users and for their owners.

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