It is something that's been bugging me for a while, as I've interacted with businesses in my locality. I wonder whether the Internet in general and the latest fads on the Internet: social media, geo-tagging etc., can actually be of benefit to local businesses?

I think I'm fairly OK with the idea of the Internet in general being a boost for businesses.  At a basic level, simply being online to receive emails from customers in terms of sales or feedback is a great step in the right direction. Using the Internet to surf competitors and understand trends in the area of business will again bring immediate benefits.

Developing a website, be it an informational one or a sales driven one has obvious benefits too. No need to extol the virtues of a basic website here.

But what of the latest internet phenomena?  Should a small business be expected to get themselves onto Twitter? Should they look to get a Facebook page, and prepare themselves to be geo-tagged by users of services like Foursquare?

My first instinct is to say "Maybe". It is clear that being on these things isn't (perhaps) bad, but they need to be carefully thought about.  In one way they're just like the internet in general: if you have an excellent website, but no one knows you're there, you might as well not be.  If on Twitter no one knows you're tweeting away merrily, again, its effort wasted.

Secondly, as a small business I think its vitally important to have something to say.  Engaging in a very plastic corporate way to advertise isn't going to work - but develop a reputation as someone who knows and you're onto something. If all you have on your facebook site is superficial marketing nonsense, you will have very few fans. Put some real interesting information on there and people will come. It is always astonishing to think of the breadth of people's interests!

It's important for anything you do online in the 'virtual world' that the tools and services link through to the 'real world', either by making time to develop the online presence, or by linking subjects that you communicate about directly back to the business you do.

Lastly, and a shocker coming from WebProductive here:  talk to someone who understands the tools and can interpret your business on the web.  Businesses shouldn't just leap at the latest fad, without having some coherent thinking in the background about how it all hangs together and should work.