Yammer exceeds $1M in 2009, to grow 7x in '10

How the company is handling its growth and what it has learned

Updated 12/13/10 to reflect that the company has exceeded $1 million, not met $1 million.

Yammer, the social network for businesses and their employees, announced Wednesday that it is extending its global reach by offering its service in six new languages, including Dutch, French, German, Japanese, Korean, and Spanish.  This will come in handy as Yammer continues to expand its overseas operations.  Serving 136 countries, more than half of Yammer’s traffic comes from outside North America, and the company plans to keep expanding.  Yammer recently announced its plans to set up offices in Europe and Australia using part of its recent $25 million round of funding.

I got a chance to talk to Yammer’s VP of marketing, Steve Apfelberg, who spoke on a panel on how to leverage social media for your business.  Apfelberg shared some interesting insights into how businesses can utilize social media, how Yammer has leveraged social media, and some of the pivots that the company made along the way.

Firstly, I had to ask about the site’s layout, which is virtually identical to Facebook.  This makes getting acquainted with the site easy because the user already knows where everything is, so it’s very easy to just dive in.  But why not create a more unique layout?

The familiarity was what Yammer was after, said Steve, who explained that the company wanted users to be able to use the site intuitively without having to read through a user manual or spend time getting used to a new layout.  By doing so, this speeds adoption. 

Furthermore, the familiar layout coupled with Yammer’s free service (it’s a freemium model, so it offers a free service and a paid premium service) makes Yammer a non-risk.  In a typical business, Steve explained, an executive might decide to adopt a new software program that only a handful of tech-savvy employees can select, but with Yammer, any employee can sign up.  Steve calls this “the democratization of software.”

Yammer makes money when users upgrade to the premium service, which allows them to add additional security features, more functionality, and customization.  Small businesses can upgrade online using only their credit card.

And the company’s business model is paying off.  Its revenue for 2009 exceeded $1 million and it is on track to increase nearly seven-fold in 2010.

Steve also talked about some of the lessons the company has learned over the years and the kinds of pivots they’ve made since launching in 2008.  For example, when Yammer originally got started, it aimed to be a Twitter-esque microblogging site for businesses and their employees, but the company noticed that users were creating apps to take surveys and polls, and the site gradually expanded to include a host of other apps.  Yammer partnered with Zendesk, a customer service product, to create a questions app wherein a customer service ticket would be attached to each question.

And it continues to grow and adapt by seeing how businesses successfully utilize Yammer and packaging those practices into educational materials for new users.  

Yammer recently raised $25 million in funding from U.S. Venture Partners.