Social media is rapidly changing the way companies do business.

Tweet, tweet, tweet. We've been hearing this word a lot lately. For those unfamiliar with the term, it refers to short posts made on social media website Twitter and one of the most basic and up-to-date forms of self-promotion on the planet.

US actor Ashton Kutcher recently became the world's most popular tweeter with a million followers, beating broadcaster CNN which posts news headlines with random posts about his life and interests.

Appearing on The Oprah Winfrey Show to celebrate the milestone, Kutcher said he liked the way social media could make one person's voice as powerful as a company like CNN.

Australian companies are now logging on to this valuable self-promotion opportunity, joining the site in droves. According to James Duthie, author of Australian marketing blog onlinemarketingbanter.com,

Rio Tinto, Telstra, Westpac, Vodafone and Jetstar all began tweeting in the past 12 months. Charity organisations Amnesty Australia, Oxfam, the RSPCA and WWF are also regular tweeters. Even Duthie, formerly an anti-Twitterist, has succumbed to pressure and become a member of the site.

Trevor Young, a partner at communications firm Parkyoung, says social media is a state of mind and forces companies to look at the way they do business.

"You've got to be willing to be open, inclusive and seeking out a two-way interaction with your customers," he says. "That's not for every business. If you're on Twitter, or any other social media because of a feeling that you need to be on, you're probably doing it for the wrong reasons."

One of the benefits of the site, Young says, is that it gives a human face to your business.

"Telstra's Twitter page, BigPondTeam, has two guys called Jase and Josh that interact with followers it's more personal when you know who's writing," Young says. "We're seeing a lot of brands and companies rush to Twitter but there's still that facelessness; companies fall into the trap of advertising and broadcasting one way but that's not what social media is about."

The problem with Twitter is that a large majority of the information generated is of no real use to anyone. Do we need to know that Oprah just worked out for an hour and is off to read the morning papers?

Or that Larry King's boys "won their little league game 11-10, wildest game of the year"? Not really. Of far greater interest is King's invitation for fellow tweeters to pass on environmental suggestions to

Obama's new green adviser, who appeared on Monday's show.

This element of the site the opportunity to listen is one of its benefits, Young says.

"You can do real-time research and find out what's going on in your community, or among your clients it's an opportunity to build both your brand and your relationships. This can help switched-on smaller companies to punch above their weight," he says.

But businesses need to be careful about how they and their employees use social media. There have already been instances of employees criticising their employer, releasing confidential information and, most recently, posing as other people, as was the case of Telstra employee Leslie Nassar, who set up a Twitter account in the name of the Federal Communications Minister, Stephen Conroy.

This week, Telstra released guidelines for employees on how to use sites such as Twitter and Facebook, asking employees to remember responsibility, respect and representation of the company. The guidelines advise employees accessing social media for personal use to include a disclaimer if they talk about the company.

But when used correctly, social media can be a valuable business tool, Young says.

"I've met people on Twitter, started a dialogue with them and it has led to business meetings, potential partnerships or projects," he says. "And when you meet them, you feel like you're at meeting number three or four there's no tentative first steps."

But though there are benefits of using social media, Young says there is no substitute for meeting people in the flesh.

"The most effective way to use social media is to combine it with face-to-face interaction," he says. "There are Twitter events all the time, where people who connect online meet in the flesh ... these kind of connections are very powerful."