Tens of millions of people are using social networks to stay in touch. In fact, Facebook alone has over 175 M users. The growth in such services is being heralded as the start of the real-time, pervasive web.
Just like email replaced the written letter, and SMS is replacing (maybe supplementing) email, status updates via Facebook, Twiiter and other real time update sites, might just replace everything. And what started as a consumer application is now becoming increasingly important as a business application.
So, what's different between email, SMS, and social media updates? In large part, social media is about micro updates (140 characters or less) and its is centered around your daily activity stream. This allows consumers and businesses to publish information that people can choose to engage with it, or not.
The problem with existing social media companies is interoperability. For example, while Twitter can be used to power a status update on Facebook the same is not true in reverse. While e-mail has common protocols which allow people to send and receive messages even if they are with different services, such as Hotmail or GMail, the same is not completely true with status updates and activity feeds.
This makes many the business model of many of these services feel like the walled gardens that killed many of the early Internet companies.
While Facebook seemingly has no incentive to open up its service, other companies are working towards a more open system and many believe there will be no separation between Facebook and Friendfeed and Twitter in the the near future.