Is social networking time-wasting?

The frenzied reaction in the media this week to some spurious claims by SurfControl in relation to the use of FaceBook in the office raises the question is online networking simply time wasting and a drain on business profitability?
It is clearly in the interest of SurfControl to inflate the negative impact of online social networking sites such as FaceBook. They sell software filters to businesses to block the access to inappropriate websites. Their estimate that business is losing up to $5 billion a year in wasted time is based upon the ridiculous and unsupportable premise that every worker spends an hour on a site such as FaceBook during working hours, every working day in every business across Australia.
Whilst this premise seems to be erring on the 'worst case scenario' end of the spectrum, the more interesting question is whether the use of social networking sites is all bad for business.
In the case of organisations such as Deloitte and other professional services firms, networking is considered an essential skill of successful consultants and a business advantage.
Within Deloitte we spend money on training our staff to network - using whatever methods are appropriate. In the case of LinkedIn and Plaxo, increasingly these social networking sites are being used to connect people within business - whether that be for introductions, or to collaborate online. In many ways they present a more efficient and effective avenue for social and business contact than the more traditional channels of face to face or phone.