Facebook is quite time-consuing. Perhaps that’s the biggest feature that makes it what it is: A powerful business tool. If used carefully, Facebook has the tendency to move any business ahead of its competition.

As with all social media its greatest benefit is that it allows you to have a greatly extended reach: your profile can potentially expose you to thousands of visitors online. If you do it right and that’s a big if.

FaceBook Demographics

If you’re wondering exactly what is the potential for extended reach, consider that FaceBook has a whopping 175 million users: only 50 million of them are in the US and 9 million in the UK. So if you’re an international outfit, you need applications like FaceBook to make sure you’re getting the potential international coverage you need.

“Yeah, but all you get on FaceBook is kids obsessed with games and music…” Not so! The fastest growing demographic on FaceBook is the 33-40 year-olds, but the over 55s are close behind them. Those are powerful demographics for the business crowd aren’t they?

There are three very important rules you need to follow if you want to be a social media success: I’ll be repeating this later because it doesn’t just apply to FaceBook:

• Never, ever be aggressive or rude. If you wipe someone out on FaceBook chances are it will go viral because everyone loves a fight. But you will put people off doing business with you for good. Always be nice even if you disagree.
• Keep your readers engaged: include interesting stuff for them and…
• Give people something to take away. Nothing creates likeability than solving another person’s problems for them–for free.

You need to spend time connecting with people on FaceBook, and once you’ve done that you need to spend more time engaging with them. If you’re not prepared to do that then perhaps Social Media in all its glory simply isn’t for you.

Engage with your customers on a personal level

One of the hugest advantages of engaging with your customers through social media is that they get to see a side of you that they normally wouldn’t: you become a friend to them and everyone loves to do business with a friend. Successful FaceBook users, or Power Users, find that their business grows virally because they’re giving people what they want or need, so those connections go away and tell other connections to go check it out.

If you ever run into reputation problems online (if, in other words, you have someone publishing unpleasant stuff about you), a strong FaceBook presence can be a wonderful ally in your reputation management strategy. You can also use FaceBook for proactive reputation management. Which is basically making sure that the naysayers can’t get a foot in the door.

So what can you do to make sure that visitors find your FaceBook page engaging and useful?

• Industry news (trade shows, exhibitions, product recalls…you get the idea)
• Tips on using your products/services
• Stories about how your producst/services have helped people
• Stories about your employees and your customers
• Special offers
• You can link to or provide product reviews

One more very important point: you can also advertise directly on FaceBook. With numbers like 175 million and a great demographic you can be sure that your ads will come up in front of the right people. Highly targeted marketing like that is hard to come by.

Image Credits: Squidoo.com

About 3 weeks ago, Facebook and Twitter ended several weeks of serious talks, in which Facebook was offering to acquire Twitter for $500 million of its stock, which also included a cash component.

While rumors of Facebook’s interest were brought up in an interview with Facebook CEO Mark Zuckerberg at the Web 2.0 Summit a few weeks ago, some shot down the idea as silly.

Quite incorrectly, as it turns out, since top execs at both Facebook and Twitter were right then at the tail end of discussions, which were initiated by the privately held Facebook in mid-October, about bringing the two together.

Those talks, sources on both sides said, are now over.

So why did the deal break down?

Well, as is usually the case, over price–was $500 million worth of Facebook stock actually worth $500 million?–and the typical concerns about integration and costs.

But, more important, it seems, was a feeling among Twitter investors and execs that the start-up should still take a shot at building its revenues–there are none right now–as well as it had done at building its growth.

“It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity–even with the economic downturn–to blow this thing out.”

Still, combining the world’s fastest-growing social-networking site with what is quickly becoming the best-known microblogging service is actually a natural fit.

That’s especially true given that Facebook–for all its powerful online social connections–has seen Twitter race past it in innovating in the “status update” arena.

While some sources at Facebook said Zuckerberg was becoming frustrated by the buzz Twitter was getting–a market that should have been dominated by Facebook–others at the company said he was interested in buying Twitter because of his respect for its progress.

Indeed, at the Web 2.0 interview, Zuckerberg called Twitter an “elegant model” and said that he was “really impressed by what they’ve done.”

Indeed, with about six million registrations, as reported in October, up 600 percent over the last year, the San Francisco-based Twitter–launched in 2006–has had impressive growth.

(It has also been plagued by technical issues, which are–to be fair–decreasing.)

In any case, for those not familiar with it, the premise of Twitter is dead simple: A registered user logs in via the Internet or a mobile phone and answers the “What are you doing?” question the service asks in only 140 characters or fewer.

It’s quite a clever idea, although–so far–not a money-making one.

To try to goose that, Twitter’s board replaced the engineer who created Twitter, Jack Dorsey, with another founder, Evan Williams, who had served as its chairman and chief product officer.

The more experienced Williams (pictured here) had already built one company–Pyra Labs, which created the Blogger blogging service–that he sold to Google in 2003. He also started the audio and video search site Odeo, where Twitter was actually born.

Still, its investors have not come down on Twitter to hold back its growth efforts, and have handed over $20 million to the start-up so far. In its last round, Twitter was valued at $98 million.

Its funders include: Union Square Ventures, Charles River Ventures, Digital Garage, Spark Capital and Bezos Expeditions, backed by Amazon Founder and CEO Jeff Bezos.

In addition, well-known Silicon Valley figures, such as Marc Andreessen and Ron Conway, have also invested. Interestingly, Andreessen is also on Facebook’s board.

Other private investors include FeedBurner Co-Founder (and now Googler) Dick Costolo, former Epinions Co-Founder Naval Ravikant and former Googler Chris Sacca.

Twitter needs all the investors it can get, since it has no revenue, although it has been exploring things like charging business customers and adding advertising into the consumer service.

Lack of revenues was an issue for Facebook, said sources, especially related to fees Twitter pays for delivery of its messages to cellphones.

While the issue has been manageable in the U.S., Twitter cut off its SMS support in some international markets this summer because of too-high costs.

But, if Twitter was offered to Facebook’s 120 million users, Facebook execs estimated that it might have to deal with huge SMS fees–up to $75 million annually.

“Facebook has its own revenue-generating challenges,” said one person close to the company. “As much as Twitter would give them a lift in the status area, it was still a worry.”

Not enough, said several sources, to stop Facebook from making another approach at some point in the future. “We’d hate to see Twitter go to another company,” said one source.

Indeed, while all are even more price-conscious than Facebook, large companies that could also be interested include: Google (GOOG), Yahoo (YHOO), Microsoft (MSFT) or a large telecom company, such as Verizon (VZ).

If it had completed the deal to buy Twitter, it would have been Facebook’s most significant acquisition by far.

Zuckerberg and Williams did meet and get along well, but the deal was primarily negotiated by Spark Capital partner Bijan Sabet (Spark is a Twitter investor) and Facebook deal guy Dan Rose.

But in this time, at least, the Twitter side was still not interested in selling at the price Facebook had offered.

The $500 million offered was in an all-stock form, said sources on both sides, at the $15 billion valuation that came from the Microsoft’s investment in the company last October.

The Twitter side felt that figure was inflated and the shares should be valued at the lower figures that have also been reported for Facebook’s true valuation, more in the $5 billion range.

That would have given the deal a $150 million price tag, which was seen as too low, especially since it was in Facebook stock and not cash initially.

In fact, Twitter wanted cash, which some sources say was offered by Facebook in the $50 to $100 million range, in addition to stock, but taking too much stock was still a major issue.

There are other ways the pair could have approximated a safer choice for Twitter, via warrants, of course, or other methods.

But, said several sources close to Twitter, the primary reason for not selling was because its board simply did not want to yet or perhaps ever.

Said one source: “The question is, is it really a good idea to sell on the first chance you get?”

Well, for Twitter, we’ll just have to wait and see about that, of course.

1. Just get going

You won’t start growing a Facebook community and learning what works and what doesn’t until you actually dip your toe in the water and get going.

2. Find a topic people care about

Yes, you’re trying to create a group to help your business. But make it all about you and you won’t have success in attracting people. Choose a hot or enduring topic or theme relevant to your industry, and you’ll have a much better chance at attracting and sustaining a community. Some examples: the Marketing 2.0 group the Bordeaux Colloquium focus on sustainability, the American Association for the Advancement of Science,

3. Be careful (i.e., be smart)

Don’t “spam” your Facebook group. By joining your group members have indicated their interest in connecting. Don’t turn them off by overwhelming them with self-interested messages.

4. Rewards help

Encourage participation by making special offers; e.g., discounts on your products or services for members of the Facebook group.

5. Create connection points

Enable and encourage personal connections between members by finding out and highlighting what individuals in the group are doing, working on, investing their time and energy in.

6. Create outreach programs

Reach out to other groups both on and off Facebook, to create and deepen affinity relationships with others.

7. Give the community a heartbeat

Invite interesting players in your industry to regularly scheduled events such as conference calls and webinars. Or create a contests, competitions, and surveys that involve members and drive participation.

8. Identify, appoint, and nurture ambassadors

Keep an eye out for particularly engaged members and then enlist their help in building and supporting the group. Appoint them as administrators, give them greater standing, and empower them to make decisions and promote the community.

9. Your name matters

What you call your group is important – choose a name, and by extension a topic and theme that people want to identify with and you’ll propel your growth by an order of magnitude. Think hard about your industry or category and try to key off a hot topic or emerging trend.

10. Watch what others are doing

There are some well-documented cases of companies successfully using Facebook groups. Among them: WorkLight Serena Software, Ernst & Young, and Towers Perrin. Study what they and others are doing and try out new ideas.