Yammer tops 7M users, sales spike after Microsoft deal

Yammer, the business-oriented social network acquired by Microsoft for $1.2 billion last year, says its sales to businesses quadrupled in its fiscal fourth quarter, thanks in part to its newfound association with the Redmond company.

Yammer, which competes with companies including Salesforce.com and Jive Software, says it added 290 new paying customers in the quarter, including GlaxoSmithKline, McGladrey LLP,  SABMiller, T.G.I. Friday’s, Trek Bicycle Corp. and Woolworths Ltd.

“When you compare it to other players in the space, it’s almost an order of magnitude more than what the others are doing,” said David Sacks, the Yammer co-founder who is now a Microsoft vice president, via phone. He said the new Microsoft connection is helping to shorten Yammer’s sales cycle and reassure corporate customers about issues including data security.

The company didn’t disclose specific revenue figures but said registered Yammer users now number more than 7 million.

Yammer uses a viral sales model in which individuals and groups can start using the product initially on their own, in many cases leading their corporate IT departments to sign up for premium management and administration tools. That approach was one of the reasons for the acquisition. Microsoft CEO Steve Ballmer said at the time that Microsoft planned to incorporate more of that strategy into its broader sales operation.

Yammer has a Facebook-style interface used for communication and collaboration inside companies. The Yammer team remains based in San Francisco, but is now part of the Microsoft Office Division and has been working to integrate its product with Microsoft programs.

One of those integrations, due this summer, will let Yammer users view and edit Office documents directly within Yammer feeds, using Office Web Apps.

“It’s going to make Yammer a place where you can actually create content, you can share it, you can discover it, and you can collaborate on it,” Sacks said.

  • Guest

    Congrats to Yammer on continuing to grow! I’m excited to see the possibilities literally exploding with respect to integration of enterprise microblogging with less evanescent knowledge management tools such as Microsoft Office.

  • LIgaBond

    I don’t buy this ‘Yammer success story’. If that’s the case, how come Yammer is losing large clients to Jive and small business is switching to Bitrix24.com, Igloo, etc? I think Microsoft has grossly overpaid for Yammer and how feels the pressure to ‘justify’ it.

    • guest

      Right. Let’s believe the unsupported allegations of a newly minted Disqus alias over MS’s legally bound executive officers. And pro tip: whether they overpaid or not is currently unknowable.

  • guest

    Once customers figure out that under MS management updates will be once every two years instead of every two months, they’ll go to Jive in droves.