Time magazine’s annual anointment of its person of the year is awaited with great interest. Winners have included Bill Clinton, Franklin D. Roosevelt, Churchill, Hitler and Stalin.

Last year’s choice was somewhat different. When the magazine announced the winner it simply declared: “It’s you.”

Thanks to websites such as Photobucket, Flickr, Facebook, MySpace, YouTube and Linked-in, online communities are the flavour of the technological month, celebrated by Time and visited by millions of people.

The leap from MySpace to the world’s business schools is not as big as might be expected.

Indeed, in the wake of the mushrooming of online community sites, business school antennae have been twitching incessantly. Community building has always been close to the heart of the schools. The development of online communities offers even more ways for schools to attempt to build communities – and for entrepreneurial students to start up businesses.

There is also work to be done in better understanding the business implications of online communities. At Cass Business School, Caroline Wiertz, a lecturer in marketing, has conducted interesting research into the effective use of online communities. She notes that online communities used by organisations are of two main types. One is brand focused and a highly effective tool for customer relationship management, product feedback, relationship building and market intelligence.

A good example is the Harley Owners Group, which brings brand motorcycling enthusiasts together to discuss products and social activities.

The other type of community is the service support, problem solving community. Cost savings are a key driver here. It is cheaper for a company to host an online community than to host a call centre or send out a service technician.

“People visit these sites because they want answers to their problems,” Wiertz says. “The functional value of the community has to be high, it has to be easy to navigate, a fast website, with a good search engine.”

However, Wiertz says that even in such utilitarian communities it is the social interaction that holds the community together. “People come to the community because they need information and they stay because of the other users. They feel part of the community.”

For some students online communities are seen as an irresistible entrepreneurial opportunity. Ajay Mathur and Peter Richards, two MBA students at Cass, have launched an online community for gardeners, www.growsonyou.com. Another pair of Cass alumni have developed an online leisure and entertainment community, www.thecult.com, which allows users to share opinions about TV shows and movies, restaurants, sport and dating.

Oxford’s Said Business School has spawned the first organisationally driven social networking site targeted at special interest and nonprofit organisations. Launched last December, www.hublounge.com is the concept of Nabil Meralli, a recent Said MBA student and entrepreneur.

“The idea for the website came to me when I was beginning my MBA. An opportunity then arose through a project-based assignment on the course for me to research the market need for such a virtual space and to produce a full business plan.”

For students and business schools, their communities have become an awful lot larger.