There are a number of reasons that a blog can benefit a site:
1) User stickyness - Because blogs are normally frequently updated (or good blogs are anyway), it keeps users coming back to your site and keeps your brand in their mind. It also provides a medium on which to introduce new products and special offers.
However, you have to have something interesting to say, that people are going to want to read, otherwise they won't keep coming back. This in my opinion is one of the hardest things about blogging, keeping a constant stream of interesting material.
2) Encourages people to link to your site, if you have an interesting and / or entertaining blog, people are more likely to link to it than your main site alone.
3) Adds more places that people can find your site from, with special blog search engines such as technorati etc, improving traffic figures to your site.
4) User interaction, rather than reading through your website which is a passive act, with blogs people can actually interact with you by adding comments etc, making people feel like they are a part of your site and increasing user loyalty.
5) Blog posts are much more likely to be added to social networks such as digg etc, again increasing traffic.
I`m sure there are more, but these are all i can think of for now!
Having a blog is a definate advantage, but hard work. Keeping users interested and entertained is more difficult than it sounds, and if you are just writing about yourself, unless you lead an entertaining and eventful life, its not going to keep people interested for long!
It can actually damage your reputation too! A poorly written blog thats rarely updated is worse than having no blog at all!
There are millions of blogs on the net now, but I suspect a high proportion of those are abandoned. People create a blog with good intentions, and start posting daily, but you can run out of things to say, or become too busy, and then its just left behind and you`ll lose your visitors. I`ve been guilty of this in the past, its actually quite a bit of work to keep an active blog, and to constantly come up with new topics that people will want to read.
Done right though, it can have a huge positive effect on your site!
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