Social media refers to web tools and services that allow users to interact and connect with others. It includes social bookmarking, blogging, microblogging, video sharing, photo sharing, forums, social networking, and more. Companies can benefit from social media by creating human connections, providing communication, increasing transparency, and building community. Many large companies actively use social media platforms like blogs, YouTube, Facebook, Flickr, and Twitter to engage with customers. The document provides tips for companies on developing a social media strategy and measuring its effectiveness.