Socialcast takes Facebook to work

A photograph of Stephanie Endicott and Marcus Smallegan, first-year students at George Washington University, is seen on their Facebook website page in Washington November 25, 2007.

SAN FRANCISCO (Private Equity Week) - More employers who are worrying about workers spending too much time on Facebook are finding that social networking tools can have a useful role in the workplace. That notion is fueling a rise in entrepreneurial activity and investment surrounding so-called "Enterprise 2.0" applications for companies to create internal social networks.

Enter Socialcast, a developer of software for building private networks that employees can use to collaborate on projects and disseminate information. The company, which is relocating from Irvine, Calif., to San Francisco, raised a $1.4 million Series A fund round last week from True Ventures and individual investors. True Ventures led the round with $1 million and angel investors contributed $400,000 to the company's first round of funding.

Along with its Series A investment, the company is also getting a new board member, True Ventures' venture partner Om Malik. Socialcast will be the first board seat for Malik, the founder of technology blog GigaOm, who joined True last fall.

Timothy Young, Socialcast's founder and CEO, says the 3-year-old company is already profitable and posted revenue last year between $3 million and $5 million. He says that interest in the company's software development has largely been spearheaded by newer employees seeking internal communication tools with features that go beyond the typical corporate e-mail account.

The company's technology integrates with other social networks, including Facebook, Twitter and Del.icio.us. Socialcast can also import activity from users' iPhones, Gmail accounts and posted videos on YouTube.

Currently, Socialcast is being used by groups of users at more than 1,200 companies and agencies, including Universal Music Group, NASA's Jet Propulsion Laboratory and the Guitar Center retail chain, according to Young. The software is free for the first 10 users in a team, but companies must pay $1 a month for each additional user.

"Organizations are trying to implement tools that resonate much more strongly with younger workers," says Young, who launched Socialcast from his home in Santa Monica, Calif., with a few thousand dollars of his own money.

The company currently employs a full-time staff of 15, and plans to use the latest funding round to ramp up business development and marketing activity.