Microsoft is no stranger to throwing huge amounts of money at markets it wants to break into – it did it with the Xbox and it’s in the process of doing it with its new Surface tablet. But even in this context, the $1.2bn it has agreed to pay for enterprise social network (ESN) Yammer seems steep, especially for a company that probably isn’t making any money (Yammer is notoriously guarded about its financial figures).
The deal shows the tech world’s belief that business-oriented social networks have a real future. The market, though, is more crowded than you might realise, with a plethora of services on offer. So which one is right for you?
Yammer was already a big deal in the ESN world, with a rapidly growing user base of some 5m and 80 per cent of Fortune 500 companies using the site. It is essentially a rather more sociable LinkedIn, with the emphasis on interacting with contacts through direct and instant messaging, rather than storing your existing contacts or finding new ones. It allows users to collaborate on shared projects and instantly share and edit each other’s documents – great if you have a group presentation to work on. Its business model is “freemium” – it won’t cost you to sign up but if you want it to be particularly useful, you’ll have to shell out a few quid. The company has said its revenues are growing but attracting users tends to cost money in the short term. Why, then, does Microsoft want it so badly? The answer is simple: the cloud. Microsoft, Google, Apple and a few independent companies are all fighting over the lucrative cloud market, which is rapidly becoming the primary space for content creation and storage. Microsoft wants to integrate Yammer into its Office 365 offering, adding value to its product and fending off rivals like Google, which offers a free alternative.
Chatter offers a very similar service to Yammer, with an emphasis on collaborating on projects with your business “friends”. You can create groups, share files and keep your colleagues updated on your schedule. Unlike Yammer, Chatter is – mostly – free. You only have to pay if, as a company, you want to impose administrative restrictions on your workers.
Probably the best known business network, LinkedIn is a somewhat different proposition, with most people using it to connect with colleagues and to mine its database of contact information. However, it is a rapidly expanding service that is rolling out more interactive features in the wake of its multi-billion float last year.
It may not be generating as many headlines as Yammer, but Jive is older and bigger than Microsoft’s new toy. Jive bosses have jumped on the Microsoft deal, saying they have heard from a multitude of potential defectors concerned about Yammer’s future after the sale. One of Jive’s selling points is its link-up with Microsoft’s SharePoint, presumably something it will face increased competition over as Yammer integrates further with Microsoft.
This network has a focus on hooking you up with contacts in the business world, through blogs, message-boards and chat.