The latest issue of Marketing Magazine includes an article on how businesses could be using Web 2.0 applications - the online sites and tools that encourage social interaction, such as blogs, forums, social networks, wikis and so on. It reports on a recent survey from Hitwise which indicates that Web 2.0 style websites (such as YouTube and MySpace) now account for 12% of web activity in the US, up from 2% just 2 years ago.

The article states that Australian business is regarded to be 2-3 years behind many countries where the power of Web 2.0 is already being used to a commercial advantage. It is seen as a new ways to forge stronger ties with customers and to be used as a marketing and CRM tool. Web 2.0 applications can also be used to monitor what consumers think about them and their products, competitors and market sector, for little or no cost.

However, as the magazine points out, there can also be big risks with Web 2.0 formats, since these social networks can rapidly spread word-of-mouth news and comment, so that any negative experiences with a business or product can get out of hand and stay online for a long time, indexed by search engines like Google and remaining on search results for a business name. The whole area of online reputation management is now more important than ever, with companies needing to monitor and react to any negative PR.

So, the article concludes, Web 2.0 should be considered carefully and used to your own business advantage but content and postings should be honest, accessible, and above all, open to the comments your consumers feel that they need to post - and responded to accordingly.