Yammer Won Last Year’s TechCrunch50. What Now?

Yammer desktop client

Yammer, a Twitter-like system for corporate communications, won the top prize at TechCrunch50 last year amidst a flurry of both praise and derision. But unlike many TC50 startups that peak during the conference, Yammer has done well for itself in the year since its triumphant win, raising $5 million and bringing over 40,000 companies into the fold.

Instead of asking Twitter’s question of “what are you doing?”–Yammer asks “what are you working on?” Employees can enter status updates into company-specific Yammer networks that allow the easy trading of ideas, questions, and complaints. Yammer is free for employees to join, but if companies want to claim a network and have access to security features (ie, the ability to suspend or remove users), they have to pay either $3 or $5 per employee per month, depending on whether they choose a “self-service” or “gold” membership. Companies with over 1000 employees get a corporate discount.

TechCrunch has provided Yammer with some much-needed visibility in the last year, but David Sacks, CEO of Yammer, says that there has been a flip side to success. “We’ve seen half a dozen clones because they see we’re getting traction.” That traction is allowing Yammer to expand. The company employs only 20 people at the moment, but Sacks says that the rapid influx of companies asking to claim their Yammer networks has led to a need for a larger sales team. “Companies want to talk to a human about why Yammer is secure,” Sacks explained.

Yammer’s next step is to figure out how to let companies use the service to stay in touch with partners, suppliers, vendors, and customers. If that network expands too much, though, Yammer could easily become Twitter–with a business model.