Social networking originally was a way for people to connect with their friends and family. These networks were an excellent way for college students to stay in contact with friends who graduated and then friends who had not graduated once they had finished their studies. This meant that the networks were built for personal use and not business use. However, they are highly effective at delivering content that is usable for the target audience (which is the friends and family of the user).
Social media was the brainchild of students who wanted a better experience on the internet than what they were currently being delivered. There were very few sites that provided the level of interaction that the creators wanted. The existing technology (such as internet-based bulletin boards) lacked certain functions such as chat and other functions that they thought would be useful. The creators of these sites took it upon themselves to generate sites that could serve the technology that would fill these niches perfectly. This how the bigger social media sites were created.
The explosion in popularity of these social networking sites is due to the fact that they are well built for personal uses. (However, they are not well built for business reasons, which would take a platform that was built for business specifically.) The early adopters invited their personal circle of friends and acquaintances to join these sites and the user based grew exponentially. The new features of the networks were exactly what that market (personal friends and acquaintances) needed to stay in touch with each other. The ability of the social networks to deliver the right technology at the right time is what aided their exponential growth into some of the most highly visited web sites in existence.
However, as previously stated, these sites quickly learned that they had a massive problem. They needed to generate revenue from this business model in order to grow successfully. If the social networks had anything it was a high number of users, therefore, this would be of great interest to advertisers seeking to get their message seen by many consumers. Many of the social networks then began to try to monetize their systems. This was the beginning of social networking for business purposes. Many businesses entered the social media realm, began trying to use status updates, and paid advertisements to push their business to greater amounts of sales.
However, because these systems were not well made for business purposes, many of the systems found that advertising was a hard model to introduce to the system. Many businesses grew frustrated with the use of the systems within the networks and only used the networks as a secondary advertising model or gave up all together. What became apparent was that any social network that was meant for business purposes would have to be built for business purposes exclusively. This is the current state of social networking for business. The bigger sites keep trying to make changes to their systems for business purposes and other sites have started to appear to fill the void created by the appearance of social media.