It used to be that oral traditions passed culture and information between people and generations.  Today, it's happening at the consumer level, and the unspeakable effect of word-of-mouth marketing has some marketers dishing out big bucks.  According to an independent research  report, word-of-mouth spending has increased from $76 million in 2001 to $981 million in 2006.  In 2006 alone, the field grew a whopping 35.9 percent, much higher than the overall marketing-services category at 7.7 percent.

"It's starting to be recognized as an established industry," said Leo Kivijard, Ph.D. of PQ Media, who headed the research.  With the holiday season coming up, the tried-and-true method may be giving some business owners more than something to talk about.--Jessica Chen

Last week, we blogged about the effects of the writer's strike on small business. Today, the LA Times published an article sharing the effect the strike is having on local dry cleaners, catering companies, hotels, florists and dog groomers. One dry cleaner that specifically caters to the showbiz industry says it lost 30 percent of its TV work one week into the Writers Guild of America strike. The business anticipates the number will double by the end of this week. Some small businesses, such as TVC Cleaners, are rethinking their business models to open their business to other clientele. "If you're dependent on one industry, you could go out of business that that industry goes down," said Mark Deo, executive director of the Small Business Advisory Network. "It's good to specialize, but it's also good to diversify a bit to protect yourself."

Blue Chip Expert is putting social networking to work--literally. A staffing website for top-tier job seekers,  Blue Chip Experts relies upon a network of talented professionals who know other talented professionals. Since its launch last year, more than 70,000 individuals have registered with the site.

You have to be invited to join the network by another organization or an individual, but once you do you can invite people you know to join in their turn. What’s more, if one of your invitees--or someone invited to join by one of your invitees--gets hired, you get a percent of his or her placement fee.

The site is the brainchild of Scott Langmack, formerly a senior marketing professional for companies including Pepsico and Microsoft. Langmack says he was struck by “how hard it was to find contract workers who met very specific requirements.” And yet, he was astounded by the number of people he met “who wanted to do contract work, had outstanding credentials and had tried every avenue possible” without success.

Langmack set out to solve the problem and make the marketplace a more efficient, a 21^st  century place to be. “We’ve digitized what executive search firms do,” he says. He sees Blue Chip as the next-generation approach to recruiting. The site uses algorithms and matching technologies to rank people on a variety of criteria, including educational level and university attended. Then social referral networking helps connect the right people to the right jobs.

Beyond that, however, Langmack wants to educate employers about the changing realities of the modern work force. For example, he said, companies are geared to hire full-time employees--even when part-time employees have better credentials and experience. Langmack points an abundance of highly trained non-working mothers seeking part-time work and baby boomers who have had their fill of working 80-hour weeks.  In the next few years, he said, “companies will need to be more open to the part-time player, and we want to be there in a big way to help drive that.”--Eve Gumpel