Social Media has been stirring quite a commotion over the last year. 50 Million blogs are now tracked by Technorati, 100 million videos are downloaded each day on YouTube and there are 107 Million members on Social Networking site MySpace. If 2006 was the year that propelled these companies into stardom, what of 2007?

As I sit at my desk contemplating life, the universe and seagulls, I can’t help but wonder where the substance lies in Social Media. For example, a social networking site or blog is an intangible ‘thing’; it can’t be touched or felt and it doesn’t have a physical substance.  And yet online monoliths such as Google are willing to invest billions of dollars into these community websites. How then does Google value networking communities? A simple answer would be numbers; the more people in a community, the more advertising revenue can be generated.  I think this is an easy way out of a difficult question; like sending more troops to Iraq to cement democracy.

Due to my current ‘newbie’ status I cannot claim to have all the answers, I can, however,argue that the value lies not only in numbers, but in the ability of those numbers to multiply. It seems Metcalfe’s Law is important here: the value of a network grows proportionally to the number of users. Without others with which to communicate, a network becomes ineffective. The more users that continue to join a network therefore add more value to the entire network. The reason for this may not be entirely due to numbers but more towards a host of variables such as the extended opportunity for sharing and generating content, communication channels and peer influence.

Enter CGM: Consumer Generated Media. Users of Social Media are now active in their media consumption and production, not just with information but with people. Social sharing sites such as Flickr (photos), Del.icio.us (links), Digg (news stories), Wikipedia (encyclopaedia articles) and blogs are just a few examples providing the Diesel for the Social Media Land Rover.

The widespread adoption of Social Media has major implications for marketers. Social Media creates an untapped pool of ideas and tastes, a buzz-building machine for companies and brands and a database of users with demographic data and high traffic opportunities. Perhaps it is these factors that are worth the billions.

SMO & SMM
So how do SMO and SMM fit into this mish mash of Social Media? For starters,  they may seem the same but are actually distinctly different. Social Media Optimisation (SMO) is optimising a website in order to spread content through social networks. In other words, creating video, multimedia or intriguing content on your webpage so that it is mentioned, linked to and spread across the Social Media hemisphere. This includes all onpage refinement such as design, usability and functionality. Having a Digg This and Del.icio.us icons are equally critical.

Social Media Marketing (SMM) on the other hand is about creating and distributing content through social networks by some form of viral marketing. Video viral clips have become the standard for creating buzz and attracting users.  Perhaps one day the QuirkStars will don the dance floor and show the world how to really shake some ass. Surely this would add credibility to our reputation?!

The point I am trying to make is that community networks and Social Media are going to play an increasingly important role for both consumers and businesses. If somebody says something bad or good about a company, chances are that it will spread, for that is the nature of Social Media.

At our upcoming WebPR+ conference, we extend these thoughts and detail how online PR, reputation management and Social Media can strengthen your company's presence, build your brand online and drive traffic to your website.