Yammer wins TechCrunch50; enterprises lose

While I do believe there is a better business model out there for corporate microblogging, Yammer is not it.
Written by Jennifer Leggio, Contributor

Of all the startups coming out of this week's TechCrunch50, the judges awarded the top prize of $50,000 to Yammer, which according to TechCrunch is "Twitter with a business model." Everyone knows I love Twitter and I want to see its concept succeed in business. However, Yammer is sadly yet another Silicon Valley bubble idea. Yet another concept that could fail and then hurt corporate social networking progress. My ZDNet colleague Dennis Howlett was incensed enough to write a piece about enterprise 2.0 and the Silicon Valley echo chamber. I'm with him 100 percent on that one.

As for Yammer, apparently any employee with a verifiable corporate email address can start or join and participate in a company microblogging group. Unlike LinkedIn's company groups, which freely allow corporations to monitor and manage their group communications, Yammer charges the company $1 per month per network member for control. Let's use a for instance: I join on behalf of my company. I get 500 of my closest colleagues to join. People start posting proprietary information. Employees begin sharing salary information. The site becomes a liability. Yammer is not controlling it for me so I have no choice but to pay for it myself or mandate that employees not use it. If I pay for it, it will cost my company $500 per month to manage. Against it's will. Outside of the firewall.

Sure, $500 may not seem like a big number to some companies, and yes, fellow bubble companies may invest in the services, but I can't see true enterprises getting on board. Do you think "Joe Fortune 500 CEO" wants to fork out tens of thousands of dollars per month to manage an off-site not-corporate-mandated intranet?

Yammer is not "enterprise 2.0." Actually, I want to scrap that term altogether. Yammer is not an enterprise solution. It does not:

  • Provide quantifiable ROI
  • Aid in the reduction of TCO
  • Streamline or automate processes
  • Improve customer support or engagement
  • Live behind the firewall nor is it a corporate IT resource
  • Create a safe and secure Web environment for employees

What it appears to do:

  • Takes control away from the enterprise and put it into the hands of employees
  • Creates the need for additional content monitoring and processes
  • Creates more work for employees running HR or communications
  • Requires that companies invest in order to manage their own employee communications
  • Makes itself one public target for hackers who want to get at companies' proprietary information or employee lists

While Yammer is a fun idea in theory (and certainly fun to say) it is not an enterprise microblogging solution. Are there any? Of course there are. The ESME microsharing project is a great example. And white label social networks -- some with microblogging -- can be implemented within the structure of a corporate network and serve as an intranet or internal communications portal. The right type of "enterprise 2.0" microblogging tool is one that the corporations can manage themselves on their own terms.

While I am a firm believer that part of the social media movement is companies letting go of communications control and allowing messages to spread, public corporations still need to be diligent in managing their employees. Sure, external spats happen on blogs and social networks anyhow. Yammer's business model almost exploits these types of corporate weaknesses. While I do believe there is a better business model out there for corporate microblogging, Yammer is not it.

But, as Howlett said, it's bigger than that. This is a bubble thing. It's going to burst.

Update: Read the response to this post by Robert Richardson of the Computer Security Institute.

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