The netroots are on fire this morning after a major theatrical event in the world of social media and politics. As I’ve said many times, politics is the most important analog to business when it comes to social media evolution. What is happening there is a vision of the future for social media in business. And this debacle with Obama is an object lesson.

The story is that some time ago an Obama fan set up a MySpace site devoted to the presidential candidate and his campaign. He secured the MySpace Url www.myspace.com/barackobama, and started building a clearly labeled "unofficial" site for the campaign. Obviously the Obama brand has some legs, and the site started to build a large network of MySpace friends. Eventually the campaign connected with the grassroots fan, and made some requests of him to fix up the site, edit some content and nix some of the "friends" in the MySpace network that might be embarassing to the campaign. The site owner agreed, and thus started a closer working relationship between the site owner and the campaign. Such a close working relationship, in fact, that it quickly became a second demanding job to keep up with the growth of the site and the campaign’s momentum.

140,000 MySpace friends later, the campaign started getting nervous about having such a prominent outpost on the Web run by someone not associated with the campaign. And they started seeing greater value for the site as MySpace began creating more political content and promotions to spotlight MySpace members like Obama and Hillary. So dialog began between the two parties about how to transition control of the site to the campaign. A lot of he-said, she-said arises now, but the apparent picture is that the campaign asked the site owner for a price to take over the site, and he asked for $39,000, plus a cut of advertising revenue from the traffic he had built. Up to now, this was all work he done as a fan, but it was a substantial amount of work–and in the world of high-priced campaigns, building a social network of 140,000 isn’t trivial, even if Obama has a lot pull-through.

The campaign allegedly responded without a counter-offer–only the claim that they didn’t have any money. Hard to believe given their record campaign contributions, and somewhat odd since they had asked for a price. What followed became an ugly use of power. The campaign decided they could take control without payment, simply by pressuring MySpace and claiming that someone was squatting on a URL they had the rights to–the URL after all was ~/barackobama . So MySpace blocked access to the site’s creater, and handed it over the Obama campaign, no questions asked.

Now it is a PR and social media nightmare for Obama. Much of his support in the blogosphere is screaming foul, and comparing the campaign’s tactics to Karl Rove’s–not a kind comparison for a liberal Democrat.

You can read more about the whole debacle here. Suffice it to say, whatever the site was worth, the PR problem would certainly have been worth $39k to avoid, and points out one more shining example of how the fundamentals have changed. This is precisely the kind of tactic that social media has evolved to spotlight and spread like the Bubonic Plague. And it’s incredibly ironic that the campaign was not able to see the obvious consequences–it wasn’t only the kind of strong-arming that lights a fire in the world of social media, it was carried out *in* the social media environment. Talk about stepping on a rake…

Take note, businesses. These kinds of PR crises can be avoided.