Burberry crossed a social media threshold this week: earning two million fans on Facebook.

The British company has invested heavily in its online platforms and digital marketing strategy and has quickly risen to become luxury’s digital darling.

Burberry regularly posts product announcements, photos, and even acoustic performances on the social networking site.

New York-based Luxury Lab has released its second annual Digital IQ Index of Luxury Brands.

The study quantifies the digital competence of 72 global luxury brands by accessing brand websites, digital marketing strategies, social media initiatives and mobile applications.

The Luxury Brands that ranked at the top of this year’s Index were Coach, Ralph Lauren, Louis Vuitton, Gucci, Hugo Boss and Burberry respectively.

Polo Ralph Lauren has announced that it will further extend its e-commerce reach with the launch of Ralphlauren.com in the UK.

After the success of Ralph Lauren’s US e-boutique, launched in 2000, the company has decided to roll out a British version on October 14.

The site will offer a full assortment of clothing and accessories for men, women and children, in addition to a full array of home products.

Champagne corks are popping again in the luxury business as “It” bags and expensive watches this year sell like hotcakes from Beijing to New York, signalling the turning of a page after the global financial crisis.

As the owner of Gucci and Yves Saint Laurent, French luxury goods giant PPR, on Friday joined a string of high-end brands reporting ballooning 2010 profits, firms and consultants predicted rosy days ahead for luxury goods.

“The recession’s starting to look like an old memory for the luxury industry,” said analyst Matthew Curtin, quoted by Dow Jones Newswires.

PPR chief executive Francois-Henri Pinault said of the group’s doubled first half net profits, “very good results … in an economic environment that remains hesitant.”

There are limits to how far a luxury company can diversify its operations without diluting its brand or confusing consumers, experts said this week.

A jeweler might successfully launch a perfume but a handbag maker might not and it is easier for a jeweler to look credible producing watches than it is venturing into making handbags, they said.

Luxury groups are finally warming to the Internet, lured by surging sales and a wider audience for their brands, though lingering suspicions could limit the level of online penetration compared with the wider retail sector.

High-end brands have been slow to embrace the Web, worried that universal access will destroy their aura of exclusivity and wary of a medium which has also fueled a proliferation in the trade of counterfeit goods.

But executives and analysts at the Reuters Global Luxury Summit this week suggest attitudes are starting to change as shoppers show a willingness to buy even the most expensive products from the convenience of their homes.