The question of why social media is taking over from SEO is partially answered in a very interesting article by Douglas Karr for Marketing TechBlog, who provides a thumbnail overview of the present problem in search engine optimization and the reason for the recent Penguin and Panda updates from Google. The SEO focus on backlinks and the use of unnatural and artificial tactic and methods in obtaining these backlinks, is at the heart of the recent Penguin and Panda updates. As Douglas Karr states;
“For companies and agencies not willing to cheat, backlinking has been a huge headache. A typical agency simply could not compete with a company that invested large dollars into backlinking schemes with SEO agencies. But the revenue associated with backlinking was too good to pass up for the agency or the client, so people climbed onboard a $5 billion industry according to Forrester.”

Why social media has become more important

This was or lead to the new Panda algorithm, and to the demise of many websites overnight on Google search. Penguin followed with the emphasis on social influences being taken into account. In a sense this emphasis on links obtained via social networking is a natural response to the artificial and often spammy sources of backlinks in the past.
In brief, the implication is that social media and social networking sources of links to your site via unique and interesting content has become one of the best and most viable routes to a higher search engine ranking on Google as well as on the other search engine. As Karr states; there is a move or focus “… away from the popular tactics associated with search engine optimization and towards improved content marketing efforts”.

Here is a succinct view of what Google is looking for to rank a website highly.
“But what does Google want? They want relevant, real content on the internet that people want to read and tell other people about. If Google doesn’t bring you the most relevant content when you search they aren’t doing their job.”

What this all means is that at the very least SEO now has to direct its efforts towards SMO or social media optimization.