Yammer pulls down $85 million in venture funding | Hacker News Reader

Yammer pulls down $85 million in venture funding

itworld.com

60 pointsbdking36 comments

The company claims that more than 85% of the Fortune 500 now have Yammer networks, including Thomson Reuters, Shell, Chevron, Nationwide and Ford Motor.

This reminds me of claims that "90% of the Fortune 500 use our software", when in reality "90% of the Fortune 500 have had at least one person download our evaluation version". How much is Yammer actually used?

I agree ... we have a free version at our company but nobody uses it

We don't throw this figure around lightly. Certainly some companies use Yammer more than others, but every company uses Yammer differently. Some companies even pay us for it.

Your reply is a non-statement that sounds like it came straight from the marketing/PR department.

What percentage of Fortune 500 companies have at least five users who posted something on Yammer in the last two weeks?

I registered with some excitement on September 11 2008, the day Yammer won first prize at TC50. I was the first Yammer registrant on my Fortune 100 company's network!

I left that company in Christmas 2010 as the first and only Yammer registrant.

Yammer did eventually hire one fellow I have a good deal of respect for though.

Oh HN, you never disappoint. So many people scratching their heads not seeing the value in Yammer, and not a single one of them have ever used it.

I've been at a company for a year who uses it extensively, and it is probably my favorite communication tool we have.

Let the down-voting commence!

I've used it, and while I see some value in it, I'm not sure I see $142m worth.

What is it about HNers that they have so much trouble understanding the appeal and success of a service like Yammer and the nature of venture investing?

For starters, Yammer is undeniably successful on pretty much every measure, including revenue (something HNers normally value). Yammer sells to businesses after all which have a good ability to pay and in a category where businesses have demonstrated such.

Yammer is executing on a brilliant acquisition model. It is a perfectly constructed freemium model that takes maximum advantage of the characteristics of email addresses (as organizing mechanism and communications tool).

And $100 million may seem like a lot of money to raise (and for what?) but remember that Yammer's founder's previous experience was at PayPal where $225 million was raised. However it's quite apparent where a lot of money could be spent going up against the likes of Salesforce, Oracle, Jive, etc: sales, marketing and product development...globally.

Some HNers need to get over their "build it in a weekend" mentality and start trying to understand how and why services get traction and become successful (if they care).

isn't there a time when a company should stop growing via venture funding and start re-investing it's own profits? you know, like a sustainable company? how to determine when this points has come? (i thought yammer was already far beyond that point)

When a company wants to grow faster than current revenue will let them, they take outside money. Maybe with this new money they will increase their burn to take on more employees and increase revenue and customer base more quickly? Maybe their is some strategic position taken with the current round.

There are many reasons why a company would raise money when they could be profitable right now. And we don't even know that they are, or are in a position to be.

Yeah, i dont know a bunch about how funding works...but i used to love playing "Transport tycoon" as a kid. Borrowing from the bank was how we got funding back then, which meant eventually you had to pay it back...i guess i just have a bit to learn?

What I can't comprehend is how any VC's are still dumb enough to invest old-school ICQ/AIM clones. They never go anywhere or make any money. When we're living in a world where I can spin up a NodeJS chat server in an afternoon there really is no pot of gold here.

Yammer isn't a ICQ/AIM clone, if anything it's a Facebook clone for businesses.

Huh. I saw it as more of a Twitter clone for businesses, that allows you to say things that would be too sensitive to say on Twitter. My workplace used it briefly, but has switched to Socialtext. Maybe it has changed in the meantime.

I'll admit it is pretty surprising to me that they're still around.

it's sort of a clone of both. The interface is almost an exactly clone of the facebook UI from 2010, but the functionality is much more like twitter.

In many cases a round of this size is like a 'private IPO' and provides some liquidity for founders or even early employees. This quote suggest that may be the case here:

<quote>The new funding “is like an IPO without the headaches,” he said, adding that the start-up can now “stay private for quite some time.”</quote>

Someone may need to correct me here, but why would there be a pressure to go IPO? plenty of companies stay out of public market (in private hands), remain strong, build brand, bring profits, etc. IF they havent brought strong numbers already, what would make anyone sure another $85 mil will?

There is strong pressure to IPO because that is a liquidity event (opportunity to turn ownership into money) for investors. The other option is acquisition. Recently, IPOs are hard, for a combination of regulatory and market reasons.

One could imagine a hypothetical world where profits paid as dividends to owners would suffice to give investors the return their business model requires but that is very much not standard practice in the US tech industry. To a professional investor (especially a VC firm), a profitable company that cannot be sold/IPOed is a failure.

Anyone ever play SimCity? if you don't keep a good balance between growth/revenue bad things happen, I don't see why that same concept does not apply to startups. Now I have not seen their revenue numbers but I would think that they must be relatively good or they would not have been able to raise such a large round. Unless this is just to keep operating and in that case things would not be going so well for them.

Yammer is currently hiring: http://news.ycombinator.com/item?id=3654071

This link also has some info on what makes us different than facebook/irc/campfire/status.net

"Sure, Yammer is just like Facebook, but we're so much more than that. Corporations don't share cat pictures, they turn into efficient business machines."

I was expecting something more substantial.

This might help a bit: http://marketing.yammer.com/billions.html

The video provides zero information about differences with "facebook/irc/campfire/status.net".

https://www.yammer.com/product/index seems much more helpful. Looks like Yammer has added lots of what would've been called "groupware" features in the recent past, none of which are present in Facebook, StatusNet, etc. Maybe so much money has been raised because investors think it will eat into Sharepoint, Notes, etc?

Yeah, that will certainly give you the bullet points for the differences. The videos I linked to gives you the more "human" differences. Not having your social network behind the firewall helps a lot. Yammer moves like a consumer company, which means big usability wins for enterprise users.

Sorry, the video points out no "human" differences. It points to humans saying they like Yammer, that's about it. I'm sure it is just fine as a marketing video, but don't pretend it conveys any information beyond "like", assuming one has ever used "social media" before.

I gave an example in the paragraph right above that. There are many more examples and testimonials from paying customers at the link I posted. I'm happy to answer any more questions.

What example? I read it again, and I really don't see any "info on what makes us different than facebook/irc/campfire/status.net"

As I already said https://www.yammer.com/product/index does give me some idea of how Yammer is different.

Yammer looks to be groupware with a cloned Facebook UI...

Why does that need hundreds of employees and $142M in funding?

I don't understand all the hate on this thread. Use Yammer at my current startup; used Yammer before at bigger companies.

Terrific product. There's a lot of features that I'd love to have, but this is a much-need space.

A social-network for work. i.e. a social network that people will actually pay to use.

Who has perfected that? $142m is really the start here. Looking forward to their future.

We use Yammer at our two-person company. It's not like Lotus Notes or other groupware I've used in the past, but there are similarities to Facebook and document-sharing tools.

We find utility in the ability to have asynchronous discussions among a restricted group of people and share links (like Facebook) and also to share documents and other files. A typical use case is someone posts a file, a link, or groups of files or links, and then we discuss them.

We could use email for the asynchronous discussions, or Dropbox or Google Docs for document sharing (and we do, sometimes, for some scenarios). But having all of these resources in a single, searchable, discussable location is very useful for us.

We use Yammer at our 300-person company and we've found it really valuable. We're roughly evenly distributed in 4 countries, so having somewhere which is asynchronous where people can see what's happening around the group provides a sense of connection between our staff. Anecdotaly, I've found it particularly valuable amongst IT people who feel more comfortable sharing ideas and opinions on there than they might do in person.

With the arsenal 37Signals provides, why would any company use Yammer? I found it as useful as Google Wave. Seriously, it could sort-of replace email if everyone in a company used it, and if Dropbox didn't exist...and of course Basecamp had never been dreamed up.

I'm a Yammer user. I'm not head over heels for it, but it's good especially for decentralized operations. I'm in a consulting company and we don't actually talk about projects as much as advertise articles we wrote, software we created, questions, or water cooler type stuff. I see the utility, but $85 Million valuation?! I don't see that. How will Yammer turn a profit with that debt load? Let's say the exit strategy is selling would anyone want to buy it at $400M? If not is it worth that risk for less?

Beyond the fact that this seems like "profit by VC injection" what does Yammer do that couldn't be more easily, more simply and more flexibly solved via Laconi.ca/Status.net?

Yammer must have a much, much bigger sales force, so we can start with whatever a vendor sales force actually does for customers.

Speaking of sales forces, isn't Salesforce Chatter the biggest (as in sales [force], at least) corporate-social-media-solution?

something about this screams "bailout"

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