Yammer Tweaks Twitter

October 30th, 2008 | Sources: NY Times

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Some scoffed when Yammer went live 8 weeks ago. With 3 million people Twittering away, did the world really need another microblogging platform?

No one’s laughing now, and it turns out the 2 companies could not be more different in many important aspects.

Twitter burst onto the scene 2 years ago and almost overnight created a new verb that entrenched itself in modern lexicon to nearly the same degree as “to Google.” “To Twitter,” users simply logon with a computer or cell phone and respond to the question, “what are you doing?”

Responses, or “Tweets” are limited to 140 characters. They range from profound and poetic to decidedly humdrum, like “I should have worn a sweater.” 

But despite Twitter’s enormous popularity and brand recognition, it has zero revenue. Not a cent. Not even from advertisements.

Twitter has argued that YouTube had little revenue when it sold to Google for $1.7 billion, and Facebook has a similar valuation on revenues of only $150 million. “Get the eyes first, worry about revenue later,” is the mantra. “Oh and by the way? Twitter registrations are up 600% this year.”

Which brings us to Yammer, the West Hollywood start-up that tweaked Twitter’s microblogging concept into an internal corporate communication tool and started generating revenue the day it went live.

As with Twitter, anyone can join Yammer for free, but they must have a corporate email account to do so.  Yammer users (Yammerers?) answer a Twitteresque question, “What are you working on” to communicate with company colleagues.  If the company wants to assume administrative control over the chatter, they pay Yammer.

It has been called Twitter with a business model, and it was enough for Yammer to secure the prestigious TechCrunch 50 prize last month. Yammer claimed that 10,000 people and 2,000 organizations signed up for the service the day it launched.

In normal times, the contrasting business strategies of the two microblogging companies would provide hours of fun debate. But the Great Economic Crisis of 2008 has taken the fun out of many things, and start-up plans focused on securing revenue increasingly hold sway.

Ten days ago, Twitter’s board removed CEO Jack Dorsey and replaced him with Evan Williams, a more experienced executive. And early next year, Twitter plans to introduce a plan to generate revenue. We bet Facebook and others will look more seriously at the top line in the months ahead as well.


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