The social networking application market will grow to over $420 million dollars by 2009, a whopping 815% increase from its 2006 size of $46.8 million, according to a recent report by IDC. As the market develops, the report continues, social networking functionality will increasingly be built directly into the foundations of communication platforms including email and IM. 

IDC identifies three emerging market segments that it says will fuel the majority of growth, all of which should be of particular interest to business users. 

The first is self-service applications that IDC says will prove particularly useful for marketing campaign teams. The second is something IDC calls “brand applications that focus on persistent customer engagement.” And the third is enterprise applications that improve communication and interaction with outside players, including customers and partners. 

While the first two market segments seem to me to be the same and the descriptions of all three are unnecessarily convoluted, the important point is this: enterprise applications, not consumer apps, will lead the social networking application market’s explosive growth over the next three years. That’s a significant statement, especially considering there are still some in the IT community who question the value of Web 2.0 technologies in the enterprise.    

“Social networking is the new must-have communication application and is being used for both marketing and operational efficiency,” said Rachel Happe, research manager for digital business economy at IDC in a statement. “Social networking applications drive engagements, information exposure and conversions as well as reducing marketing and operational costs.” 

So, does this report qualify as a sober, realistic assessment of the social networking market, or is it the latest volley of Web 2.0 hyperbole? Not to hedge my bets, but I think it might be a little of both.  

Predicting 815% growth is pretty bold, and any time you hear the phrase “the new must-have,” your B.S. radar should start buzzing and blinking. But as I wrote a couple of weeks ago, I don’t think Web 2.0 is a bubble waiting to burst, akin to the dot-com bubble of the ‘90s. And I definitely think social networking tools, blogs and wikis have an important role to play in the enterprise, so I agree with the report that enterprise social networking apps will likely lead the market’s future growth.  

Hey, even if IDC’s prediction is off by half, that’s still about 400% growth, which is none too shabby. I guess we’ll just have to check back in 2009 and see if IDC hit the mark or not.