I'd like to share my own definition of social business:
A new form of commerce where consumers, empowered by new social technologies and behaviors, bypass traditional channels and acquire more information, goods and services directly from each other.
We are at the beginning of a new era in social media, where the medium turns from being primarily about communication to become as much about knowledge and business.
Web 2.0 is evolving much as Web 1.0 did. The World Wide Web began as an interconnected network of static web pages that conveyed text information, but it matured into a tool of business, interactivity and rich media. The same is happening with Web 2.0, but there will be one enormous difference in how business develops in the Web 2.0 era: This time, the new tools won't be about replacing big companies with other big companies (Amazon replaced Borders, Apple iTunes replaced Tower Records, etc.) Instead, social business will be more about facilitating business from peer to peer rather than from corporation to consumer.
Tools like Facebook and Twitter have taught people the power of sharing more widely and altered attitudes about privacy. They have created the current environment that will enable the next big wave of change. But while Facebook and Twitter may participate or even lead us into the social business era, the coming five to ten years will not be about sharing pictures or posting status updates but rather how consumers can gain more economic power, make better decisions and save money.
This process has already begun, of course. Take, for example, information you use to make decisions about travel. When is the last time you purchased a Mobil Travel Guide? Once the indispensable travel bible for selecting hotels and attractions, the Mobil book series has been replaced by ratings and reviews provided by online travel agencies (such as Orbitz or Expedia) or ratings sites (such as TripAdvisor or Yelp). In 2011 Forbes Travel Guide, which licenses the Mobile Guide, published its last set of guidebooks and launched its own Yelp-like site, Startle.com.
Increasingly social business won't be about just the information you use to make purchase decisions but about the transactions themselves. The availability of other consumers' cars to rent in real time (from RelayRides and others) may begin to make a dent in Avis and Zipcar. The opportunity to lend or borrow money directly with other consumers (via LendingClub and Prosper) may challenge banking business models. And access to people's extra bedrooms or homes (via Airbnb and VRBO) could affect the hospitality industry.
It will not take much for social business to alter industries and challenge established players. For comparison, just look to ecommerce, which represents less than five percent of all retail in the US. That tiny slice of the retail pie was enough to rewrite the rules for entire industries and sink companies once among the powerful Fortune 500.
To me, the term "social business" is not about startups or social media budgets. Instead, I see social business as a wave of transformation that will alter fundamental business models and reset the relationships between consumers and suppliers.
In ten years, the idea of someone "liking" a brand may seem as quaint as non-functional brochureware sites seem to us today. Successful social business will not be determined by who has the biggest fan page but by who best rethinks their marketplace and empowers consumers.