More small businesses are catching on to Facebook, LinkedIn and other social networking sites as powerful workplace tools, a new study shows.

According to AMI, the number of small companies using integrated social networking services is expected to jump from 300,000 to more than 600,000 in the coming year. The current figure represents only about five percent of all U.S. small businesses, the New York-based consulting firm said.

To encourage more businesses to get involved, many sites now offer features aimed specifically at smaller companies, including contact and client groups.

Within the next year, about 500,000 businesses will use social network as tools for promotional efforts, researchers said.

"Those businesses not currently using social networking services will find that the resources available will be especially useful in competing under current market conditions," AMI analyst Nikki Lamba said in a statement.

In a similar study by 8e6, an Orange, Cali.-based Internet security firm, about half of 500 employees interviewed said they used social networking sites at work. Younger workers were especially likely to communicate with colleagues, prospects and clients through social networks.

Published on: Nov 3, 2008