Facebook is obviously the most-used social networking site these days, and a lot of bakers don't even bother to have a website anymore. They just put up a facebook page and call it a day.
That's fine for some purposes, but you need to be careful if you do that.
Keep in mind that facebook is not a charity, its a business that intends to make money off of you one way or another. Whether they're busy selling your information or shoving ads down your throat, you need to make sure that what people are seeing on facebook is what you want them to see.
Facebook's goal is for the most people to see the most information, since that will keep them on the site longer and will allow facebook to show them more advertising.
Check your privacy settings often, since they tend to be reset a lot without any kind of notice. Some of the things you should keep track of is how photos of you are tagged, whether people can see your personal posts, and who can post on your business wall. And keep your personal and business pages separate.
You can separate your "friends" on your personal page into groups, then restrict who can see what you post. I use this if a wedding business asks to friend me on my personal page. I have no reason to think that a person who runs a business I might have worked with once needs to know about anything personal that I'm doing. So I restrict my posts so that businesses can't see anything that I post personally. The business page is open to everyone, but my personal page isn't.
Remember that anything you put up there is going to be there FOREVER.
I know a woman who's a recruiter for a certain business. She said that they use facebook ALL THE TIME to find out about people who are applying for jobs. A lot of the stuff she finds is not compatible with being hired, too!
I've also heard of bakers who had complaints from clients about the cake falling over, being too dry etc. When the baker went on the client's facebook page, they found photos of the cake being cut (obviously not falling over) and people shoving it into their pieholes, so it wasn't too dry to eat. Evidence...
A couple of days ago one of my friends had someone post a nasty comment on her business page. With just a few clicks she realized that this woman wasn't a client and probably never would be one, since her daughter is also a competing business owner in the same town. So the other business was basically getting their relatives to post rude remarks on the competitions' pages.
It never fails to amaze me how much personal info people put on facebook and online in general. Just be careful, because beyond the issue of nosy business competition there's also identity theft, and I'd be willing to bet that facebook is the identity theft playground. Check this video out, then go check your privacy settings and lock them down!