If 2006 was the year of “Web 2.0” then 2007 is the year of “social media”. For individuals anyway. Australian businesses and politicians generally don’t “get it”.

Social media is mainstream. Two million Australians have Facebook pages and 3.5 million read blogs. MSN Messenger has 7 million users here, and even Ja’mie King says “I’ll MSN u 2nite” without explanation.

But few businesses use social media. Why? I suspect there’s two reasons, apart from an endemic inability to adapt and change. One is about the tools, the other is about business culture.

So far most social media tools have come from start-ups with funny names like Flickr and Twitter and YouTube. Media reports of the Next Big Thing are usually pitched as “look what those weird young folk are doing”. When the Next Big Thing becomes mainstream, the media ADHD attention span has moved on. So the impression is that it’s all a plaything for kiddies.

The second problem is that social media goes against the grain of how most businesses operate. Just as I wrote that politicians only see social media as a kind of TV, businesses see it as another advertising medium to buy into. That misses the point. Social media is about conversation.

Businesses are very bad at conversation. They want to pretend that everything’s always perfect, and control all communication so it’s “on brand”.

As a result, when they try working with social media they tend to take one of two fundamentally wrong approaches. Either they act like boors at a party, loudly parroting their brand message without actually participating in the conversation. Or they set up their own private conversation forum — and then edit out anything negative. Either way, people soon stop listening.

The first problem might be solved when social media tools come from mainstream providers like Microsoft. Interestingly, Microsoft itself is encouraging their staff to write blogs. Their corporate blogging policy isn’t 45 pages of legalese but a simple set of bullet points.

The second problem is harder, because it means businesses themselves need to change to embrace honesty, transparency and authenticity of communication.

Even Microsoft recognises this is a generational change. As one young employee said, “The old guard is highly competitive, the new guard is more collaborative… It’ll be at least another decade before the outside world starts recognizing the change that’s currently happening internally.”

Disclosure: Some of the ideas in article emerged during a “geek dinner” where Microsoft paid the bill.