The mechanics of making online business networks work for you are poorly understood.

WITH SO much attention focused in the media on social networks such as Facebook and MySpace, it's easy to forget that these social media tools began life as business tools and business networks.

The time-honoured practice of making contacts and talking up who you know transferred to the web and electronic networks long before Facebook, the former student networking tool that now has approximately 42 million members, was even conceived of.

Before the MySpace/Bebo boom, there was Ryze, a networking tool that seems now to have stalled in the wake of LinkedIn and its main competitor, Xing.

But whereas many people love Facebook, the benefits of online business networks, and the mechanics of how to make them work for your business, are poorly understood.

You can find books that tell you how to blog for your business but little advice on using the likes of LinkedIn and Xing. And ironically, few businesses blog, whereas all of them network.

As well as LinkedIn and Xing, there is Ecademy, Ryze, Fast Pitch, BizWiz.com and Spoke.com, and no doubt there are other networks that would qualify for inclusion, making business the largest social networking niche of all.

"There are only two business networks," says Lars Hinrichs, chief executive of Xing. "For the EU and Asia, there is Xing. For the US and UK, there is LinkedIn."

Xing, founded in 2003 as OpenBC, is based in Hamburg, Germany, and has about five million members.

Despite Ireland's EU membership, it seems Xing is at a disadvantage here. It lags behind US-based LinkedIn in the English-speaking world.

"The cost of acquiring members in the English-speaking world is very high," explains Hinrichs.

One of Xing's more intriguing claims is that it is the first web 2.0 initial public offering. Xing raised almost €36 million when it listed on the Frankfurt stock exchange in December 2006 and began using the cash to expand. It now has substantial networks in Germany, Spain and Turkey, as well as less dense concentrations in Britain, Ireland and the US.

In the third quarter of 2007, Xing had a pretax profit of €2.07 million, at a gross margin of 42 per cent, compared with €1.13 million in the second quarter of 2007 and €590,000 in the third quarter of 2006. Business is growing.

In comparison, LinkedIn claims to have gone into the black in May 2007, though as a privately held company it is not obliged to publish its results.

Subscription incomes at the two companies are thought to be roughly equal.

The facts seem to speak abundantly for online business networks: they are among the few web 2.0 companies that make real profits.

The basics of business social networking are not dissimilar to Facebook. You create a profile of yourself and your business and then go out looking to make contacts.

"Some 20 per cent of our members say they conduct new business on Xing," claims Hinrichs, "and 60 per cent say they have found new important contacts here."

But divining exactly what the outcomes are of using social networks for business is not easy.

Fast Pitch owner Bill Jula, who rolled out the fastpitchnetworking.com platform in late 2006, believes that the playing field is little understood.

"Xing and LinkedIn do get most of the press," he says. "LinkedIn is based in Silicon Valley and has large amounts of private-equity funding . . . Xing is public and spends well over $1 million on marketing . . . Despite this, we measure up quite well - in fact, we have a higher market penetration in the US than Xing."

Each business social network appears to have slightly different characteristics. Fast Pitch began life as a physical networking service, bringing businesspeople together in 3,000 networking events a year across the US. It now provides its members with services such as free press releases within the network.

The ability to network freely is not necessarily a promise that every network will make. On LinkedIn, for example, it is not the done thing to write to other network members who you don't already know. Only if you take out a subscription ($19.99 a month) is it possible to cold call, and then only discreetly. The protocol is to ask another member to make an introduction for you, and the platform facilitates this by showing you who has a direct link to whom.

In contrast, Xing allows members to write to any number of other members. It doesn't restrict your ability to make contacts, other than asking that you respect others members' interests - in other words, don't, if you are a car salesperson, introduce yourself to someone who loves bicycles.

Social networks also, typically, give you insights into who has been watching you.

On LinkedIn it is possible to see who has viewed your profile, though the information is patchy. You might be told, for example, that you have been viewed by "someone in the media industry".

In contrast, on Xing you get to know everybody's name and you have immediate access to their profiles too. The differences soon become obvious - where Xing is open, LinkedIn is discreet.

While Facebook wins plaudits from the business community for the ease of networking, it is worth remembering that it is primarily a social tool.

Business networks collectively make up a pool of about 10 million members and the number of users is growing.

The only missing ingredient is a guide that shows you exactly how to use them to win friends and influence people.

Online networks: steps to success

Profile yourself fully including photograph, leaving no gaps or uncertainty about your qualification.

Create public profiles on LinkedIn or Xing that search engines like Google can find. That will draw people into your network.

Think small. Some people accumulate hundreds of contacts when in reality a smaller network might be more manageable and reflect a sounder approach.

Be active - go in search of contacts but use the system's internal search engines to identify people you can realistically do business with. Resist spam-type activity.

Offer help before asking for it - become the go-to resource for a subject. Most networks have the facility to post articles or questions and answers.

Differentiate. Social networks really force you to think about what differentiates you and your company - after all there are five million other people on each of the major networks.

Think laterally about the use you might make of a network - for example recruiting rather than sales.

Get to know all the tools on the network: press releases, introduction, advanced search, groups, event management etc.