Called “Looking Glass,” the product is still in prototype and will only be available to a few companies in the near term. It sends e-mail alerts when social media activity picks up considerably. The sentiment (i.e., negative or positive) of that chatter and the influence level of the content creator are reported in the alert. Digital flow charts show what days of the week generate the most activity on Twitter, Facebook, Flickr, YouTube, and other social media sites.

But interweaving social media data with reporting from other campaign channels may turn out be Microsoft’s most significant contribution to the already mature field of social media analytics. Feeds from social media sites can be connected to other business elements like customer databases, CRM centers and sales data within an organization. The data integrate via Microsoft’s enterprise platforms like Outlook and Sharepoint.

A handful or so companies will begin testing Looking Glass in the coming weeks. According to a spokesperson, the company hopes to release it to the broader marketing public sometime next year.

While testing the system during the past nine months, Marty Taylor Collins, a group marketing manager for Microsoft, said the information acquired on at least two occasions saved her department from a serious misstep. First, the tool halted her team’s plan to discontinue an ad campaign when it helped them discover that a lead character had quietly become popular. In another instance, a PR disaster was averted during the beta-test release of Windows 7, after a system crashed just after launch.

“We love to push out content and [social media] is a great channel for that,” she said. “But if you are not using it as a listening tool, then you are really not getting the complete benefit of a Twitter or a Facebook because a part of [your] job is to watch the conversations on the wall.”

As a possible example for everyday organizational uses, an electronics manufacturer could find out if an angry blogger is at all connected to one of its bigger distributor or retailer customers. Or an automaker could overlay its sales and support data information in the tool and analyze those factors with what’s being said about its brand or car models at Facebook.

More on the Microsoft blog.

Today com.motionblog launches a new weekly feature where we help our readers keep on top of the latest developments in the rapidly-evolving world of social media. Check back each Friday for the top headlines of the past week.

Live.com by Microsoft

The news: This week, Microsoft’s Live.com online portal has evolved from a search engine into a new social network. Site users are automatically connected with their contacts on the popular instant messaging portal Windows Live Messenger. The users’ profiles include basic personal information and can pull content from other blogging sites, microblogging sites, and photo sharing sites. Users can access other online services including e-mail, calendar, online storage and downloading services that include other Office programs such as Movie Maker. Microsoft’s goal is to ultimately increase site traffic on Live.com and they’ve leveraged what they own: instant messaging.

Key question: Can Microsoft gain enough traction with Live.com to become a real player in the mass social network market dominated by MySpace and Facebook?

Facebook Engagement Ads

The news: Using a healthy mix of both online advertising and social networking, Facebook launched a new “engagement ad” format this week. The ads appear on the main login page and prompt users to RSVP to a TV show season finale or comment on a movie trailer. That ad then gets promoted by sharing the update with the user’s friends. Facebook is charging more for the new engagement ads than it currently does for the display ads. The ads give Facebook users three unique experiences: commenting on ads for all friends to see, giving virtual gifts and becoming a fan of a certain ad.

Key question: Can Facebook turn an enormously successful social network into a successful business model?

Sponsored Videos on YouTube

The news: Although there has been buzz for some time, YouTube formally announced the launch of Sponsored Videos. The videos direct viewers to certain clips that they might be interested in after conducting a search. Marketers will be able to use this new service by seeding a campaign or to launch a new video. The product strives to help advertisers target keywords in a cost-per-click auction similar to that of Google’s AdWords service. The ads have a thumbnail image and three lines of promotional verbiage pointing to a specific page.

Key question: When will Sponsored Videos (if at all) replace AdWords on Google?