Much Yammering over nothing?

New York Times published an interesting article this week, which compared and contrasted two microblogging sites – Twitter and Yammer.

Twitter is the big kahuna with over 3million visitors while Yammer, who won TechCrunch50 prize for start-ups in September was dubbed as “Twitter with a business model” and has about 60,000 users. Note: According to Compete.com, the unique user count for this new site has skyrocketed to over 200K within the first month of its public launch (much of it, thanks to Techcrunch and New York Times, no doubt).

The article mentions that Yammer has already started generating a ‘modest revenue’ and described briefly how the site works,

…Anyone with a company e-mail address can use Yammer free. When that company officially joins — which gives the administrator more control over security and how employees use the service — it pays $1 a month for each user. In Yammer’s first six weeks, 10,000 companies with 60,000 users signed up, though only 200 companies with 4,000 users are paying so far.

I think it’s a brilliant way to leverage social media for the enterprise and makes one wonder why the folks at Twitter didn’t think of this. It’s also commendable that Yammer has managed to monetize in such a short period of time, but that being said, Yammer has a long way to go before it can be considered a serious contender in the enterprise space.  While  monetization is a critical challenge in the consumer space; both monetization AND adoption are the key issues in the enterprise space.

David Sacks, the Yammer CEO/Founder says,

On Twitter, people write about the important and the mundane, like, “At school and debating whether I should have more coffee.” With a workplace focus, Yammer will not deal in such trivialities, Mr. Sacks said. “People don’t want to hear from their friends five times a day about what they’re doing. But they do want to hear from their co-workers five times a day about what they’re working on,” he said.

The comments in the follow up article by New York Times are very telling and not everyone agreed on the need for a new utility to find out what their co-workers are doing and others didn’t even want to know. 

According to the user numbers shared by Yammer, there are about an average of 20 users/company, which means that either only smaller companies are signing up or the adoption in the larger companies is very low or both.  At the companies who have signed up, it sounds like the early adopters have jumped on the bandwagon and have embraced Yammer wholeheartedly, while the majority still remain reluctant to join.

Some of the greatest barriers to adoption and engagement by the enterprise crowd are: inertia and information overload. Inertia leads to little or no sharing of information due to limited time, lack of incentive, or conflict/self-interest (job security, appearance of being a slacker, didn’t want to be bothered, etc.). The latter is the result of electronic clutter in the workspace, so the employees are probably more likely to tune out any additional sources of distraction, especially when they already have IM, Email, Intranet etc.

Despite concerns about Twitter’s inability to monetize, 3million+ (albeit freeloading) user base is nothing to scoff at. While Yammer’s ability to monetize so quickly is commendable, at the current $1/mth subscription model ($4K/mth), it will need many more paid users to ensure a sustainable business model, sans VC funding.

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