Discover Poll Says Number of Small Business Owners on Social Networking Websites Nearly Triples in Past 3 Years

RIVERWOODS, Ill.—Social networking by small business owners has nearly tripled in the     past three years, jumping 23 percent in the past six months alone,      according to a new survey from Discover, but less than a third of owners     are using it to promote their businesses.

In polls conducted in April and October of this year, the percentage of     small business owners who are members of an online social networking     community increased from 48 percent to 59 percent. But only 29 percent     of all small businesses said last month that they have ever used social     networking websites to promote their businesses.

“Before social networking caught on, small business owners were limited     to more traditional methods of finding new business through face-to-face     outreach, local advertising, basic e-mail and word-of-mouth, which can     be time consuming,” said Ryan Scully, director of Discover’s business     credit card. “Now that they see some opportunity for reaching specific     web audiences exponentially through their own core contacts, it’s     conceivable that skilled entrepreneurs are already using social     networking as a very surgical marketing tool.”

Discover has been surveying U.S. small business owners about the issues     that affect them for more than four years through the Small Business     Watch. The first poll about social networking was conducted in October     2007, when only 22 percent of small business owners said they were     members of a “popular general-interest online community.” In April 2010,      the question was rephrased to ask if they were “a member of any online     social networking community such as Facebook, Linked-In, MySpace or     Twitter,” and 48 percent said they were. By October of this year, the     number climbed to 59 percent.

Discover’s polls also show that 76 percent of small business owners are     spending more than an hour online every week related to their     businesses, up from 66 percent in October 2007. Looking closer at the     numbers, the percentage of owners who were spending more than seven     hours a week online for business reasons actually dropped from 26     percent to 20 percent in three years, but the percentage of those     working from three to seven hours per week climbed from 19 percent in     2007 to 33 percent in 2010.

Of the 29 percent of small business owners who now say they are     specifically using social networking sites to promote their businesses,      48 percent cite the biggest benefit as “getting new business leads” over     getting business tips, finding new suppliers or benefiting in some other     way.

“Small business owners don’t have a lot of time to waste, so if they’re     online they have a specific reason to be there, and they want to get     something out of it,” Scully said. “Because it is a virtual     word-of-mouth marketplace, social networking would appear to be a     natural extension of what small business owners do every day. The issue     is how to make it pay off.”

In 2010, 31 percent of small business owners say networking online has     had an impact on their bottom lines, up from 19 percent in 2007.

Consumers are warming to the idea of social networking as a way to hear     about small businesses: 36 percent of approximately 3,000 consumers told     Discover that they would consider using a small business that they heard     about through a social or business networking site, up from 31 percent     in 2007.

“Friends and family members have been recommending their hair stylists,      accountants, plumbers, doctors, decorators and mechanics forever,”      Scully said. “Exactly how entrepreneurs will tap into those networks     proactively remains to be seen. Now that they’re seeing social     networking as a way to get new leads and influence the bottom line, it’s     only a matter of time.”

The views and opinions expressed by small business owners who     participate in the Small Business Watch survey are their own and do not     necessarily reflect those of Discover     Financial Services or its affiliates.

About the Small Business Watch

The Discover Small Business Watch is a monthly index measuring the     relative economic confidence of U.S. small business owners who have less     than five employees, a segment that consists of 22 million businesses     producing more than a trillion dollars in annual receipts. The Watch is     based on a national     random survey of 750 small business owners. It is commissioned by     Discover Business card, which strives to offer the best business credit     card for American small businesses, and is conducted by Rasmussen     Reports, LLC (www.rasmussenreports.com),      an independent survey research firm. The numeric index is calculated by     assigning values to responses to a set of five consistent questions. The     base value of the Watch was established at 100.0 based on surveys     conducted in August 2006. In addition to generating the index, the Small     Business Watch surveys small business owners every month on key issues,      and polls 3,000 consumers four times per year to gauge purchasing     behavior and attitudes towards small businesses. For past results and     survey data, visit www.discovercard.com/business/watch.      For information on Discover Business card, visit www.discovercard.com/business.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment     services company with one of the most recognized brands in U.S.      financial services. Since its inception in 1986, the company has become     one of the largest card issuers in the United States. The company     operates the Discover     card, America’s cash rewards pioneer, and offers personal and     student loans, online savings accounts, certificates of deposit and     money market accounts through its Discover     Bank subsidiary. Its payment businesses consist of Discover Network,      with millions of merchant and cash access locations; PULSE, one of the     nation’s leading ATM/debit networks; and Diners Club International, a     global payments network with acceptance in more than 185 countries and     territories. For more information, visit www.discoverfinancial.com.

Appendix

Rasmussen Reports, LLC

Discover Small Business Watch

Gauging Attitudes on Social Networking

1* How much time do you spend online every week related to your business?

2* Has online networking had any impact on your bottom line?

October 10-12, 2010

3* Have you ever used social networking sites to promote your business?

4* [only those who answered yes to #3] About how many sites have you     used?

5* [only those who answered yes to #3] What is the biggest benefit to     your business of being part of an online networking community?

6* Are you a member of any online social networking community such as     Facebook, Linked-In, My Space or Twitter?

7* Are you a member of a popular general-interest online community?

8* Would you consider using a service or small business that you heard     about on a social or business networking site? [Asked of 3,000 Consumers)