•A theory of business value of IT.•Empirical study on a sample composed of 100 small firms.•IT infrastructure enables firms to explore and exploit knowledge to innovate.•Social media play a role of complementary IT capability on this equation. This study examines the impact of information technology (IT)-enabled knowledge ambidexterity on innovation performance, and the potential moderator role of social media capability on a sample composed of 100 small U.S. firms. The empirical analysis suggests that IT infrastructure enables the firm to explore new knowledge and exploit existing/new knowledge to innovate more and better. We also find that social media capability has a positive moderator role in this equation: IT infrastructure and social media capabilities work together to enable knowledge ambidexterity.