Yammer: It's the Business Model, Stupid


There's a storm of criticism in the blogosphere about TechCrunch's selection of Yammer, which Michael Arrington refers to as "Twitter with a business model," as the best startup in the TechCrunch50. Still, it's hard to argue with numbers. Two-thousand organizations and 10,000 people signed up for Yammer when it launched on Sept. 9. (Though likely a fair amount of that was folks wanting to be part of the geekish in-crowd.)


Typical of the scorn heaped on Yammer is Chris Cardinal's rant on HTMList.com. Writes Cardinal:

Call me crazy, but any company that has essentially refactored another, popular site's concept into a small, microcosm, tightly focused business model is in for a MAJOR ass-kicking when papa bear decides to build their own iteration of this functionality. Why the hell shouldn't Twitter tomorrow announce Twitter Corporate or Twitter Networks.

This begs a bigger question. Why hasn't Twitter already rolled out its own service geared toward businesses? Perhaps because it isn't yet ready to address the issues that make many senior-level executives reluctant to embrace emerging technologies?


Check out the list of factors mentioned by execs as barriers to adoption of Web 2.0 technologies at their companies: security concerns, fear of using unproven technologies (translate this as worries over reliability and downtime), senior management apathy, and concerns about negative impacts on productivity.


Strike one: Twitter has experienced a couple of security breaches in the past few months, noted here and here by IT Business Edge blogger Carl Weinschenk. Strike two: Even Twitter fans, like Brandon Quintana, describe the service's reliability as "not so great." Strike three: Management types will likely feel more at ease with a service that gets kudos from Salesforce.com's Marc Benioff -- who reportedly likes Yammer so much he wants to buy it -- than with one whose founder seemsoddly reluctant to figure out how to make money. Services with no discernible revenue streams flummox many business folks.


Strike four: A cursory glance at Twitter reveals that many people use it mostly to record highly random musings. Of course, this happens with communications channels like instant messaging as well, but folks will probably be less inclined to post large volumes of extraneous stuff if they know the boss is -- at least sometimes -- watching. This can be a good thing or a bad thing, writes BusinessWeek's Stephen Baker:

... We work in a big company with an org chart. Most of us scribes don't want the editors who evaluate our work (and pay us) to read our back-and-forths. ... So while I imaging that this tool works perfectly for a start-up team, it could be problematic for more established companies.

Like Twitter, Yammer lets users publish status updates, news, links and questions. They can subscribe to people or topics that are relevant to them -- following a project that will affect their department, for example. They can connect with other users through a directory and search archived messages for more information on topics of interest. Users can send and receive Yammer updates from the Web, a desktop client, iPhone, BlackBerry or an e-mail client. It was developed an as internal tool at Geni.com, where company execs liked the concept of Twitter, but thought it would be more effective with some business-oriented tweaks.


Among Yammer's security features: the ability to force browsers to use secure sessions, restrict access to office or VPN only, or establish specific password policies. Also, only users with confirmed e-mail addresses from an organization can view and post messages to its feed.


Agreed,Yammer is not so innovative. But sometimes the business model is really what counts. Without iTunes, the iPod would be little more than an incredibly stylish and overpriced Walkman.


As for the apparent disgust that Yammer is just one of a long line of Web 2.0 companies that specialize in snowing VCs, not in generating original ideas, comments following Baker's BusinessWeek post mention two other "microblogging for business" sites: SocialCast and present.ly. And there are doubtless more out there.