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How does “Social Media” relate to business and organizations?

Social media applications (web 2.0) allow people to create, share, and annotate various forms of information (text, images, and video). With their participative, interactive, and collaborative nature they can change the way we communicate, work, and design business processes – across virtually every functional vertical. Companies that are faster and smarter in embracing the opportunities and risks that come with the new ball game will outperform those who lag behind. They will enjoy a new form of competitive advantage.