Social media is a media for social interaction. It turns communication into interactive dialogue. Like Facebook, Twitter and Skype.
The best way to define social media is to break it down. Media is an instrument on communication, like a newspaper or a radio, so social media would be a social instrument of communication.
In Web 2.0 terms, this would be a website that doesn't just give you information, but interacts with you while giving you that information. This interaction can be as simple as asking for your comments or letting you vote on an article, or it can be as complex as Flixter recommending movies to you based on the ratings of other people with similar interests.
Think of regular media as a one-way street where you can read a newspaper or listen to a report on television, but you have very limited ability to give your thoughts on the matter.It is easy to confuse social media with social news because we often refer to members of the news as "the media." Adding to the confusion is the fact that a social news site is also a social media site because it falls into that broader category.
But social news is not the same thing as social media anymore than a banana is the same thing as fruit. A banana is a type of fruit, but fruit can also be grapes, strawberries, or lemons. And while social news is social media, social networking and wikis are also social media.