The newest trend in e-commerce: Social media meets local networking.

Social commerce site Groupon offers daily deals to nearly two million subscribers in 27 U.S. cities.

When David Morton, owner of the Pompei chain in Chicago, signed up with an Internet startup to offer a coupon online, he expected to sell a few thousand at most. Instead, during the 24 hours the coupon was posted on November 22, more than 9,000 local consumers purchased an offer that got them $10 worth of pizza for $5.

The coupon was an all-time sales record for Chicago-based Groupon, a hot startup that brings the buying power of the masses to the social web. After launching with local merchants in its hometown one year ago, Groupon today offers deals to nearly two million users in 27 cities in the U.S. including New York, Charlotte and Austin.

Here’s how it works: Groupon sends a daily email to subscribers with a deal, or “Groupon,” for a local business or event, like a salon, restaurant, class or concert. If they want in, users then sign on to Groupon’s site to pay by credit card and have a year to redeem the coupon.

Before “the deal is on,” however, a minimum number of users must agree to buy. More

(MSFT) (AAPL) (GOOG)

CEO Benioff goes from "cloud" to crowd.

Benioff chats about Chatter. Photo: Salesforce.com

Marc Benioff, the man who invented cloud computing at least as much as Al Gore invented the Internet, is pushing a new idea. It's called Chatter, a mashup of Facebook and Twitter for the workplace that his company, Salesforce.com (CRM), plans to begin selling next year.

Salesforce.com's main product is something most worker bees will never see. It's an online tool that salespeople use to record their prospects and completed deals. It has done so well because it mimics far more expensive software pioneered by Siebel Systems, which is now owned by Oracle (ORCL), where Benioff began his career. Benioff, a relentlessly effective marketer, pioneered the concept that companies could rely on Web applications for what previously had been complicated software programs that resided on corporate computers. Salesforce.com is so successful (and popular with investors) that it's worth $8 billion, a mere 100 times Wall Street's estimated earnings for the company's current fiscal year.

The reason Benioff is jazzed about Chatter is that it represents an opportunity for everyone in the corporate world to use Salesforce.com software, not just salespeople. Chatter gives all employees the ability to broadcast and tune in to people in their own company, much in the way the two buzziest social-media sites enable communication among groups of like-minded people and, more specifically, their friends. "Twitter and Facebook have opened the door to the enterprise world to  walk through," says Benioff. More

Marketing online is about more than jumping on the social media bandwagon

By Sam Cece, CEO, StrongMail Systems.

A decade ago, the term social media didn’t mean much to consumers, let alone marketers and corporate executives.

Cece says platforms change but good marketing principals prevail. Photo: StrongMail

Today, none of us can get away from the term – it’s everywhere. Companies are jumping on the social bandwagon, erecting fan pages on Facebook, developing corporate Twitter accounts, creating groups on LinkedIn and producing channels on YouTube–all in the name of reaching, engaging and influencing customers on a more personal level.

While the game has certainly changed, it feels as if the social media pendulum has swung a bit too far in one direction. But by taking a closer look, it becomes clear that the more things change, the more they stay the same.

Social media isn’t new (email is considered by many to be the first social network), word-of-mouth marketing has been around for decades (look at the way Amway and Mary Kay Cosmetics products are sold) and viral marketing isn’t a fresh idea (arguably the pyramid scheme, which dates back to Charles Ponzi, was fueled by viral marketing). More

The man behind #swineflu and #HowBlackAreYou was the hit at this year's NYC webfest

Baratunde Thurston. Image: O'Reilly Media

This has nothing in particular to do with Apple (AAPL), but it's very 2.0.

We spent much of last week at a conference in New York City called Web 2.0 Expo — a celebration of the "next generation Web" where one of the centers of attention was the giant Twitter screen set directly behind the keynote speakers that showed what the audience was tweeting about whomever was onstage.

The speakers included a typical mix of Web celebrities, including O'Reilly Media's Tim O'Reilly, Digg's Kevin Rose and Jay Adelson, author Douglas Rushkoff, Flikr co-founder Caterina Fake and White House chief technology officer Beth Noveck.

But the hit of the conference — judging from the laughter, the applause and the tweets — was Baratunde Thurston, Web & Politics editor at The Onion.

More

Survey finds young executives embrace online social networking tools to market their companies and themselves

A new study on top executives' use of social networking tools shows that sites such as Facebook, Twitter and LinkedIn have made serious inroads in the C-Suite.

According to a survey of chief executive officers and other senior staff, two-thirds of respondents say online networks play an important role in deepening relationships with colleagues and clients. The study of 100 executives, conducted by public relations firm Margolis & Co. and the Young Presidents' Organization, will be released later today.

Not surprisingly, business-oriented networking site LinkedIn is proving to be the most popular social network among the respondents. Some 75% of those surveyed say they use LinkedIn; Facebook attracts about 62% of this high-powered crowd (the respondents can list more than one site) and Twitter pulls in about 42% of those surveyed.

Simon Preston, chairman of YPO-WPO International, notes that executives who join a global professional association such as Young Presidents' Organization are already hip to the benefits of networking.  And given that the members are, by definition, young, it stands to reason they'd embrace high-tech networking, too. More

At least one company is making money off of social networking. The game developer behind 'FarmVille' and 'Mafia Wars' has seen its web-based games take off – and deliver profits.

Mark Pincus, founder and CEO of Zynga

On any given day 500,000 tractors are sold on the Internet. But don't start buying stock in John Deere or Caterpillar just yet. These are $20 "virtual" tractors that belong to the 50 million players of FarmVille, the largest and fastest-growing social game on the Internet.

Social games are free online applications accessed through sites such as MySpace and Facebook. If you've spent any time on either site you're probably familiar with titles such as FarmVille, Mafia Wars, and Caf World. All three games, which rank among the top five games played daily on Facebook, were developed by San Francisco-based Zynga, one of the tech sector's most talked-about companies these days.

Behind the buzz: Annual revenue at the two-year-old firm is likely to surpass $100 million this year, prompting speculation that the company — backed by the likes of LinkedIn cofounder Reid Hoffman and PayPal cofounder-turned-investor Peter Thiel — will soon go public. The software company also has managed to do something that other hot online brands such as Twitter and Facebook have not: Zynga has found a way to make social networking profitable.

Zynga was founded in 2007 by Mark Pincus, 43, who also started social-networking site Tribe.net and software company SupportSoft (SPRT), which eventually went public. (The name Zynga is a misspelled tribute to his deceased American bulldog, Zinga.) While many of his Web 3.0 peers rely on advertising and sponsorship for revenue, Pincus makes its money by getting gamers to buy virtual goods, like tractor fuel or land in the case of FarmVille, that enable players to build bigger farms at a faster rate.

By developing games on social networks, Zynga is able to capitalize on the viral nature of the platform. (Zynga estimates it has 70 million monthly unique visitors.) Gamers can invite friends to join them in the game, and they can send updates on their progress to their friends, stoking interest. More

Technology isn't a cure-all for getting employees to talk to each other. In fact, it can be the enemy.

By Scott Raskin, CEO, Mindjet

Raskin: Employees need to get leave their cubicles and desks, literally or virtually. Photo: Mindjet

How do you harness the creativity of your workforce? In this age of Twitter, Facebook and other so-called Web 2.0 tools, technology seems like an obvious way to get employees to collaborate.  Ditto your suppliers, customers and other interested parties.

But collaboration, high-tech or otherwise, isn’t so easy to manage. Renowned business strategist Gary Hamel is one of many business leaders to comment on the challenges of sparking workforce creativity. In his book Leading the Revolution, Hamel dedicates a chapter to Design Rules for Innovation. He notes that a company’s intent on generating sustained wealth must create “an open market for ideas…a dynamic internal market for ideas within the organization.”

In essence, Hamel calls for a return of the collaboration that once stood as the cornerstone of innovation in Western culture – a culture that predated Tweets and status updates.

But what are we talking about when we describe this sought-after collaboration “renaissance”? More

Think you can create the next Twitter or Facebook? Good luck with that.

Markson: Building an online business has many offline challenges. Photo: Blekko

By Mike Markson, co-founder, Blekko

Many a consumer looks at an “overnight sensation” such as Twitter or Facebook and muses: “That service is so simple — I could do that.”  If only it were true.

It turns out that starting a business on the web is hard.   Very hard.  And I’m not talking about the technology – although that part is hard, too.   I’m talking about the business part: building a user base and finding a way to make money. Those are really hard problems.

Whether you’re a start-up or an established company, here are the hard truths you must face if you want to build a successful online media property.
More

Box.net CEO Aaron Levie. Photo: Box.net.

Cost-conscious businesses are looking online for IT

By Aaron Levie, CEO and co-founder, Box.net

Something is clearly happening in the cloud. Two major juggernauts – the government and Microsoft – have both recently made cloud-related announcements. The government (hardly ever considered an early adopter) is planning to launch a cloud computing ‘Storefront’ to ease the federal deployment of these online services, with the ultimate goal of streamlining operations and saving money. Microsoft has finally detailed its plans to launch a web-based version of Office, albeit not until next year. More