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Yesterday FT had a very interesting and well researched article by Scott Morrison on the ‘power’ of blogging. The aggregating and networking prowess of blogs, that is, this time used to the detriment of a large company that ignores complaints from its customers.

It started with a simplegripe posted on a weblog - the blogger was unhappy that his new mobile phone did not work as advertised. It was not long before other angry bloggers chimed in with their own stories, flooding the “blogosphere” with a stream of complaints that culminated last month in a class action lawsuit against the second-largest wireless network operator in the US. The lawsuit against Verizon Wireless - and the way it came about - highlights the challenges that weblogs pose to corporations.

It picked up on the most interesting aspect of blogosphere:

Tech-savvy people have for years shared their views through obscure internet chatrooms and bulletin boards. But easy-to-use blogging software and powerful search engines are now creating vast and efficient “word of mouth networks” on which tens of millions can compare information.

Yes, and the trusty Scoble (thanks to him for doing such a splendid job in explaining blogs to corporate world) appears:

If companies don’t understand that and don’t learn how to track what people are saying, they are going to be hit violently with PR problems that they don’t understand or know where they are coming from.

And, funnily enough, it is blogs that would help companies with crisis management. The case of Verizon PR disaster signals that companies cannot hide more or less successfully behind a wall of press releases, PR spin and market power:

Hundreds of disgruntled Verizon Wireless customers took to the blogosphere to trade stories, swap hints about ways to adapt their phones and tell of their efforts to make the carrier correct the problem. Several posted letters in which the company tried unsuccessfully to mollify its angry customers.  Verizon Wireless, which declined to discuss the lawsuit, found itself conducting a crisis-management exercise in full public view.

Blogs are clearly credited (or blamed depending on where you are standing) with providing a sufficient reason and critical mass for the plaintiff to bring action against Verizon.

“Blogs were very instrumental in him being able to, in a relatively short time, determine that nobody was going to give him any relief,” said Michael Kelly of Kirtland & Packard, the law firm representing the plaintiff.

There are more examples in the article of cases when blogs caused headaches for corporate America but there is also sound advice from Mike Masnick, chief executive of Techdirt. Most companies are oblivious to blogs and those that are aware do not know how to respond and believes that:

… the best strategy is to engage bloggers openly and honestly in their realm. Any whiff of insincerity will be picked up and turned against a company.

Remember Mazda ‘blog’, for example?

I guess it’s appropriate to end with Scoble’s quote whose blog managed to humanise Microsoft.

It’s the new world and you want to be part of the conversation