There is still an ongoing debate over what a blog actually is. Here's a definition closest to the truth, in my humble opinion:
"A weblog, web log or simply a blog, is a web application which contains periodic posts on a common website. The posts are often but not necessarily in reverse chronological order. A blog would usually be accessible to any Internet user. "Weblog" is a portmanteau of "web" and "log". The term "blog" came into common use as a way of avoiding confusion with the term server log."

So what good does id do?

Well, for instance, in terms of search engine marketing, a good blog with unique content will attract links from other blogs, thus increasing the amount of times search engines actually visit your website. Another good thing about blogs is that they let you speak freely and honestly without using difficult, official language. Language normally not acceptable in business is perfectly acceptable in blogs - and good communication in business is crucial.

Another pro is the opportunity to establish and spread the word about your brand and distinguish your company from the competitors simply by telling your story. Finally you will be able to make actual relationships with your business surroundings - customers and suppliers, which will definitely help you grow in the long term.