Websites like Digg and MySpace get millions of visitors and have the power to drive traffic – sometimes large amounts of traffic. The social networking phenomenon has engaged millions of people to interact, link together, and share information. While this tool has primarily been focused on social aspects of networking, there are an increasing number of sites that focus on networking for businesses purposes. And that brings us to the next iteration of social networking: Can it be of value in driving customers to small and mid-size businesses outside of traditional channels, such as advertising and marketing?

In order to find answers to this question of whether social networking has any value to small business, I recently caught up with Geoff Karcher, CEO of the Karcher Group, a search engine marketing firm, at the recent Search Made Simple conference that his firm hosted in Akron, Ohio.

While Karcher acknowledged the lure of social engineering for driving business, he emphasized that there are also pitfalls. Unless your business has a clear social networking strategy in mind and the social networking sites you choose fit your target market, you could waste a lot of time and money.   “Don’t start participating in sites like Digg and MySpace just because everyone else is doing it,” he says.

But there are businesses that can benefit from networking -- and all small businesses can benefit from a greater understanding of this technology trend. Karcher had some great advice when I interviewed him. I asked him three simple questions and here are his answers

IncTechnology: Digg and MySpace can drive large amounts of traffic. What’s wrong with that?

Karcher:  With any online search strategy, you have to keep your eye on the ball.  It’s not about traffic.  It’s about conversions and sales.  Ask yourself:  Are the people who visit a typical small business website from a Digg link or who visit a business MySpace page likely to become customers?  If so, then it could be a winning strategy for your company.  But if you think the person who arrives from Digg is not likely to ever visit again, take a long hard look at why you are devoting time and energy to Digg.  Since most small businesses have limited resources, you may find your limited time and money can be better spent elsewhere.

IncTechnology:  Is there any type of business that could benefit from the social networking sites? 

Karcher:  Certainly.  For instance, we have seen musicians who are able to drive sales, newsletter signups, and other meaningful actions from a MySpace page.  But for something like MySpace, you have to have the type of business that appeals to the typical MySpace demographic of younger people.

Sometimes there is a residual benefit through the search engine results from participating in social media.  For instance, a Digg entry that points to an article on your site may be highly ranked in the search engines.  It could result in traffic being directed to your site.

IncTechnology: What should business owners focus on, if not on social networking sites?

Karcher: I’m not saying that you should never use social networking sites.  Sometimes they can be an effective part of an overall strategy.  But if you run a small business and have limited time and money, I suggest crawling before you try to run.  Focus on four fundamentals:

  1. Natural search optimization.
  2. Paid search campaigns.
  3. E-mail marketing.
  4. Blogging.

These four areas will bring small businesses the best return for the effort.  And they stand the test of time.

Social networking, according to the experts

So there you have it. An assessment of this new trend and its usefulness for small business from the mouth of an expert. As with most efforts to build your business, he advises that you don’t look for shortcuts.  There’s no substitute for focusing on the fundamentals. Don't rush into the latest new Web technology -- such as social networking or social media -- without first developing an overall plan of attack.

Anita Campbell is a writer, speaker and radio talk show host who closely follows trends in the small business market at her site, Small Business Trends.