It is hardly possible to separate social media from SEO these days. In fact, they are so inextricably linked that you cannot achieve good search engine ranking without social media marketing; similarly, one cannot succeed in social media marketing by ignoring basic SEO. To understand how and why SEO needs social media, you need to understand that search engine optimization is based on authority and relevance at its core. And for relevancy, you will need conceptual content (if not killer content) with right keywords.
You need to add regular content (fresh and unique) on a regular basis. And a blog is the best bet to add fresh content to a site on a regular basis. Second comes a community or a forum. Just like blogs, community allows you to interact with your visitors and at the same time provides a great way to add content to your site. Comments and forum discussions drive both user-interaction and growth. And all these (blogs and community content) are parts of social media.
For authority, you need more and more numbers of back links to your site. And for a successful link campaign, you will need bloggers and sites like Stumbleupon, Digg, Reddit, Delicious, and other online communities. Twitter and Facebook (though they provide no-follow links) too help in search engine ranking, in terms of getting quality visitors to your site. Thus, SEO needs social media.
Similarly, social media too needs SEO. With a proper boost from the major search engines, it is not possible to succeed in social media marketing. If a company plans to launch their social media marketing campaign only through bookmarking, social news sites, social networking sites, and other online communities, there is hardly any chance that they will hit the front page. Also consider that completion is immense in these communities; there are several other slavering marketers who are also trying to get to the front page of sites like Digg or Delicious. Therefore, to succeed in social media marketing you will need to depend on your search rankings; both in general search results and a blog search tool. Be it a bookmarking or a post in Twitter or Facebook, it will affect the search results.
Just like you need a blog on your site to add regular content for SEO purposes, blogs cannot survive without proper search engine optimization. Also remember to use your company name as the main keyword while marketing your business through social media sites.