The notion of employees discussing company issues in an unmonitored public forum is sure to give some managers sleepless nights, but they may have to get used to it. Blogging, or weblogging, has become the latest internet craze.

Easier to set up and maintain than traditional websites, blogs are online journals in which individuals publish regular entries along with links to other blogs and websites.

Their popularity among internet users is now spurring companies to experiment with blogs as a way of communicating with employees and customers. Sun Microsystems, the US technology giant, sanctions more than 650 blogs written by employees, including one by Jonathan Schwartz, president and chief operating officer. A Microsoft employee, Robert Scoble, has become something of an internet celebrity for his blog, Scobleizer, in which he talks about life as a "technical evangelist" for the company.

At Macromedia, the US software company, a group of trusted employees called "community managers" run blogs to allow them to interact with the company's customers. "The blogs enable the personal commentary and perspective of our experts to go straight to customers in a very efficient and rapid way," says Tom Hale, Macromedia's senior vice-president. "There's also a feedback loop where information comes in through the blogs and this has informed some of our product planning decisions."

The informal, personal tone typically adopted by bloggers is at odds with traditional company-wide messages, but Mr Hale says that this informality is vital to a company's successful use of the medium. "If a blog is just carefully veiled marketing information or a slightly reformatted press release, then it's really not that valuable," he explains. "Blogs need to put a personal face on the company."

So, can community managers freely express their opinions or be critical in their blogs? According to Mr Hale, they can - as long as they stick to the topic of Macromedia products. "You don't get them writing about what they had for breakfast," he says.

Companies that use blogging to communicate with outsiders, including investors, customers, suppliers and the media, must place considerable trust in their writers. As well as posing a risk to corporate reputation from critical postings, bloggers may inadvertently reveal sensitive information or cause legal problems through libel. Yet many pitfalls can be avoided by careful selection of bloggers.

"It's about hiring the right person who can tread the line between telling the truth and meeting the needs of the company," says Mr Hale.

Some companies, uncomfortable with the openness of public blogs, use them as an internal communications tool. Dresdner Kleinwort Wasserstein, the German investment bank, has set up about 120 internal blogs to promote discussion and distribute information, including some that encourage users to share ideas, requests and criticisms of in-house information technology systems. Traders use the medium to share information and research. "We think of it as the open-source marketplace for ideas," says JP Rangaswami, chief information officer. "It lets us expose concepts or issues to a wide audience and discuss them dispassionately."

All employees are free to contribute to the blogs, and Mr Rangaswami estimates that there are several thousand active users in the company. According to Sean Park, global head of debt syndicate and credit trading at Dresdner, the company plans to give all employees the opportunity to set up their own blog. "It's potentially a very interesting tool to tap into the social fabric of the company and better understand where knowledge lies," he says.

While the reach of blogging is one of its attractions, it can mean that quality and accuracy vary. "We have to do this with care", says Mr Rangaswami, "and we need to ensure that it is not perceived as an oracle of truth but as a series of people venturing their valuable, but vulnerable, professional opinions."

In the early days, blogging software was often rudimentary, but as business has begun to embrace the medium, the tools have grown in sophistication. Six Apart and UserLand - two providers of blogging software - have launched enterprise versions of their applications, while developers of content management tools, including International Business Machines, Open Text and Socialtext, have added blogging features to their offerings.

Mr Rangaswami points out that blogging has a number of advantages over more traditional collaboration tools, such as e-mail. "While it can be abroadcast medium, e-mail is not 'all to all'. With blogging, I can look at the entire conversation set - it's searchable, recorded and shareable with a wider community."

With e-mail inboxes groaning under the weight of spam, companies are beginning to see a future in blog-based dialogue. Scobleizer: http://scoble.weblogs.com Macromedia: http://www.markme.com/ mxna/index.cfm Jonathan's Schwartz's blog: http//blogs.sun.com/jonathan Blogs and advertising, January 4

WORDS OF ADVICE FOR CORPORATE BLOGGERS

* Keep it personal: a distinctive human voice is essential - readers will instantly switch off if they sense that postings are the work of the corporate communications department. Remember that blogs are typically personal opinion: this should be made clear via a disclaimer.

* Ensure quality and accuracy: bloggers should be experts in their field and encouraged to write only about what they know.

* Update regularly: blogging is a fast-paced medium and readers expect regular postings - often up to several times a day. A blog will rapidly lose its influence if it is not kept fresh with new content.

* Set appropriate levels of editorial control: companies must make it clear to bloggers that certain topics are taboo - for example, discussing stock prices or company strategy. However, blogs thrive on irreverence and spontaneity, so a cumbersome set of guidelines is unlikely to be helpful.