Not so sure about social networking adding value to your business but it definately can't hurt. The more exposure your business gets the better your sales will be.
I think it can hurt very much. In our country, there is a bank where one of the lead managers photographed an ass of female colleague and posted it to twitter i think. He was fired - and the bank lost the image of "different, open and human" company.
Since social media is used as a feedback channel, many companies have an added value to their products by providing customer care. And there are also many other cases, connected with other technologies like augmented reality.
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