Social networking tools are proving to be invaluable marketing and engagement platforms for the smart small businesses which have embraced them.

This BBC report provides some anecdotal insight into how several small businesses in the US have benefited by adopting and adapting to the powerful networking potential of websites such as Twitter and Facebook.

Networking Together – an WSJ Online article – describes how the rapid growth of social networking sites is giving small businesses an invaluable opportunity to dramatically expand their reach.

Small businesses, being more nimble and usually more approachable, are apparently better positioned to take advantage of the social networking phenomenon than larger companies. However, it does take some effort and planning to successfully leverage this medium.

The trick is to create a web presence that is compelling enough for your target audience to visit regularly and, crucially, for members to start contributing content to.

Most businesses are failing to take advantage of the potential benefits offered by the rapid growth of the social networking phenomenon. This according to a recent Gartner study which claims that businesses that harness the social web appropriately can “increase savings, productivity and profits”.

The gut reaction of most businesses is to block their employees’ access to social sites as such activity is perceived to be frivolous time-wasting. However, some smart firms are starting to realize that incorporating the social networks into their work-flows can actually dramatically increase their employees reach and productivity.

One such example is the use of social networks in the recruitment space. Many organizations have discovered that social networking sites are proving more cost-effective and efficient at recruiting the right talent than even specialized recruitment consultants. Indeed, even the high-end recruitment firms themselves are already using the social web as a key resource for tracking down the right candidates.

Another interesting development is in the way employees within an organization are communicating amongst themselves. Many teams have discovered that the messaging capabilities embedded in most social networking sites are far more effective at enabling collaboration and team-work than such traditional tools as email.

Bottom line – don’t dismiss the social networking phenomenon as a passing fad or distraction. It’s here to stay and can actually be turned into a powerful productivity tool if incorporated properly into your workflow.

The unprecedented slugfest in the Democratic presidential primary campaign in the US seems to be finally drawing to a close. Most pundits are backing Senator Obama to overcome the dogged challenge of former First Lady Hillary Clinton.

Much press analysis has been focussed on the complicated permutations of the US primary system (pledged delegate counts vs. super-delegate backing vs. popular vote, etc). However, I personally feel that the really interesting story here is how the Obama campaign has successfully leveraged the power of the Internet to overcome the seemingly invincible lead that Hillary Clinton started off the campaign with.

BBC News has a good write-up on Mr. Obama’s internet strategy that is well worth a read.

As the article points out, the internet favours the outsider – a good lesson for small businesses trying to outmaneuver incumbent competition. The Obama team launched their campaign with their website fully developed and ready for action – another lesson to small businesses to not treat their web presence as an afterthought.

The Obama campaign also embraced emerging social networking tools to rapidly mobiilse an army of volunteers and amass a huge funds war-chest. In fact, Mr Obama’s was only persuaded to enter the race in the first place when an unofficial MySpace page quickly gathered 160,000 supporters.

At this stage, the Obama campaign’s momentum seems likely to carry him all the way to the White House. The US will then have not only its first black President, but also its most web-savvy President to date. It would be interesting to see how he would leverage the power of the internet while in the Oval Office.

According to Forrester research, spending on Web 2.0 applications is set to boom in North America and Europe. Releasing its survey findings at the Web 2.0 conference in San Francisco, Forrester believes that traditional enterprises are finally starting to embrace this “fundamental new way” of communicating with employees and customers.

Such traditional consumer giants as General Motors, McDonald’s and Bank of America have already embraced tools like RSS feeds, blogs, podcasts and social networking. Analysts estimate that more than 60% of North American and European companies will make Web 2.0 a priority in 2008. It looks like the smart money in the Web 2.0 economy will be on the Enterprise side.

While the big investment focus in the Web 2.0 space remains in North America and Europe, the conditions are ripe for such applications to establish a foothold in Singapore. The promise of island-wide wireless broadband access is slowly becoming a reality, and a host of innovative mobile devices have begun to show up on our shores (although we are still awaiting, with drooling anticipation, the official appearance of the much-desired iPhone here).

The key Web 2.0 categories are: Blogs, Mashups, Podcasting, RSS feeds, social networking, widgets and wikis. Though much of the development in these technologies have been focused on engaging the youth / geek markets, the real winners will be those companies that can leverage these technologies to solve real business needs; thereby taking a bite out of the multi-million-dollar revenues that the traditional business-software industry commands.

Bronze medal social network (behind ever newsworthy Facebook, and MySpace) has announced that they have been taken over by AOL for a cash deal worth US$850 Million. The deal far surpasses the US$500 News Corp paid for MySpace in July 2005 – but the average price for each of their claimed 40 million users is slightly lower – US$21.25 vs. the US$25 Rupert Murdoch paid for each of MySpace’s 20 million users.

However it must be noted that their figure of 40 Million users is slightly contentious with Wikipedia listing some 20.3 million, and some of Bebo’s other claims have been questioned.

LinkedIn has unveiled a mobile version of its social network. Point your mobile browser to http://m.linkedin.com/ to check it out.

Only basic functionality is currently available in the mobile version, but LinkedIn promises that more fully-featured, phone-specific features will be coming online soon. It is also accessible in six languages, including Mandarin.

A video introduction to the mobile LinkedIn app by Branden Duncan (LinkedIn’s director of engineering) is available on YouTube.

LinkedIn, with approximately 20 million members, is far smaller than MySpace or Facebook. However, its focus on the professional networking niche seems to have kept LinkedIn immune from the social networking fatigue that has beset its more popular rivals recently. LinkedIn has nearly tripled its unique visitor statistic over the past year, hitting a high of 3.6 million unique visitors in January 2008.

Social web king, facebook.com, has seen it’s first ever drop in monthly users according to analytics firm Nielsen Online.

Almost half a million users who visited the site in January 2008 didn’t bother to return in February. Competing sites like Bebo.com and Newscorp’s MySpace have reported similar drops in traffic.

So far Facebook has been able to find investors, and justify their massive spending (In the coming year Facebook plans to spend US$ 200 million on servers alone) with their rapid growth. The end of the growth cycle will increase the pressure on facebook to find a way to turn their popularity into a viable revenue stream.  Facebook’s advertising platform, which allows advertisers to target extremely specific customers, has so far met with a tepid response.

At the peak of the excitement, Facebook was collecting almost 200 thousand new users a day, and Microsoft spent US$ 250 million buying 1.6% of the company – a deal that valued Facebook at $15 billion.

Todays news suggests that those frothy days may be over.