Social media unlike traditional media such as newspapers, television, books, and radio is fundamentally different. It is not finite meaning there are no limits. Audience participation, adding comments or editing the stories is the social differentiator. Then the content itself by virtue of it's electronic format can also take the form of text, graphics, audio or video. These media can be combined and made available via feeds that can be downloaded by users with feed readers or pulled into other distribution sites featuring mash-ups of content from various sources.
The term Social Media has several different connotations, however in the context of internet marketing, it refers to a group or network of web properties primarily driven by the users. For example, blogs, forums, and video sharing sites. Social Media Optimization (SMO) is the process of trying to get one's content more widely distributed across multiple networks.
There are two sides to Social Media, the first side is made up of on-page tactics that a webmaster can do to improve their website for inclusion in network services. This is known as SMO as stated above. Such optimization includes adding links to services such as Technorati, Digg, and Del.icio.us so that their pages can be easily "saved and submitted" to and for these services.
Social Media Marketing (SMM) is the off-page tactics side of the equation. This includes writing content that is remarkable, and news-worthy. Marketing this content is done by promoting links on the services mentioned as well as more traditional SEO tactics or creating video that may become viral when posted on Youtube or other video sites. Social Media is all about being social so this off-page work includes getting involved in other blogs, forums and online communities.
Source : http://ezinearticles.com/?Social-Media-Marketing-(SMM)-For-Your-Business&id=934906
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