It is fair to say that social media and its many platforms is a
constantly evolving beast. When considering purchasing a business
or acquiring business assets, particularly in transactions
involving IT related intellectual property, it is common practice
to ensure that domain names and email addresses are in check.
However, in the age of social media and networking it is essential
to undertake a thorough review of a target's social media
presence, particularly any blogs, LinkedIn, Twitter, Instagram,
Facebook and Pinterest accounts. Ensuring that comprehensive due
diligence is undertaken in the social media space can give you
valuable insight about a target as well as identify areas of risk
that have potential to impact the commercial negotiation of a
Thorough due diligence of a business' social media assets
allows valuable insight about the business, its staff and its
general interactions with its customer base. For instance, if you
are looking to acquire a business and its key employees, the
LinkedIn profiles of staff members is a useful source of
information. You can establish the network of connections that
staff members have as well as obtain information about skills and
references. It is also ideal to examine a business' Facebook
page to see what feedback has been received from consumers as well
as gauge overall consumer satisfaction with the business and
whatever products and services it offers.
By undertaking social media due diligence you will be in a
position to assess what assets are of value and would be desirable
to be included in the transaction. It will also bring to light the
question, 'who owns and has the rights to operate any
relevant social media account?' For instance, if a
corporate Twitter profile was established by an employee outside of
the scope of employment, who actually owns the account and its
30,000 followers? This is not a question that you want to be asking
as an afterthought.
Ultimately the importance of social media to any specific
business will depend on how engaged a business is with social media
as a marketing or networking tool. That is why it is key to ensure
that its value is identified and assessed at the outset. As a
general rule, IT and social media due diligence should go hand in
hand with overall due diligence.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Businesses should review their standard form contracts for unfair terms to ensure they do not fall foul of the new laws.
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