Viral Loop: From Facebook to Twitter, How Today's Smartest Businesses Grow Themselves by Adam Penenberg; Hyperion, 274 pages, $25.99.  By Kerry Hannon, Special for 

Adam Penenberg’s latest book, Viral Loop, is catching.

Penenberg, a professor of journalism at New York University, dizzily taps into the energy of the entrepreneurs who over the last decade and a half created some very successful Web-based businesses –FacebookPayPal, Hotmail, to name a few. Their mode of operation: viral marketing, a method of product promotion that relies on getting customers to market an idea, product or service by telling their friends about it, usually by e-mail.

There is a big difference between virility online and what is found in nature, he points out. “Most people do not spread viruses intentionally. Over the Web, however, users enthusiastically disseminate information, ideas and more.”

Penenberg’s well-reported analysis of the viral landscape, from its history through its future promise, will resonate whether you plan to start a business, promote one online or simply are feeding off its offerings both as a consumer and a social butterfly.

Through interviews with Web pioneers, and extensive use of books by other authors, magazine and newspaper articles, he weaves together an engaging tale of how viral businesses start, operate and ultimately make money (or will) in today’s Web-savvy world of commerce and social networking.

What’s a viral loop? Think Hotmail. In 1996, the firm placed a link in every online message offering the recipient the ability to set up his or her own free Web-mail account. Within 30 months, Hotmail went from zero to 30 million members. Viral networks include big guns such as Facebook, Twitter and LinkedIn, along with hundreds of others around the world.

It’s pervasive. “Because we are almost constantly communicating with friends, family and colleagues over a vast viral plain, our written self-expressions, whether they be forwarded e-mails, ideas, jokes, links or memes, spread virally. Not just person to person, but social cluster to social cluster. As the Internet continues to go more mobile, becoming gradually untethered from the desktop, this viral plain is both breaking up and expanding,” he writes.

To advance the Andy Warhol observation that everyone will be famous for 15 minutes, Penenberg surmises that in the future, everyone will have his own TV show. “What is a profile on Facebook, MySpaceBebo or Tagged but a kind of reality show starring … you?” he asks.

For a business to make it in our Web world, it needs to drill down to the core of its consumers. It’s the consumer who will ultimately become the billboard for a business and spread the word.

As au courant as it sounds, viral marketing has been around for decades. The 1950s Tupperware party was “the greatest viral network of its day,” Penenberg writes. Its “rabbit-like” growth was the epitome of word-of-mouth virility. Each party attendee was a potential salesperson.

Virility is suited to the Internet “where enough clicks can project a message to millions of people.” It has proved a success not just in business but in politics. Barack Obama‘s presidential bid delivered grass-roots campaigning to the Web by uniting social networks and the mobile Internet into a vital platform of Obama’s successful effort to win votes.

What about making money from the business itself, not just by building up a free consumer base and selling it for megabucks? A final section, “Monetizing the Social Graph,” presents ways a viral business can get people to make recommendations through their online social network for paying advertisers. As with Tupperware, people trust the opinions of those they trust, while they usually disregard pop-up ads online.

Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves by Adam Penenberg; Hyperion, 274 pages, $25.99.

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