Yammer was an exceptional company, it is now a part of MSFT. So it is gone.

It is unfortunate that the postmortem analysis that I have seen lacks fair commentary. There seems to be two directions of thought and both treat it as phenomenon.

Yammer succeeded because it understood Freemium to Premium. It was a rational purchase, acquired because it proved itself or was clearly on a path of traction and sustainability. Because of that, MSFT had to have them. But reality is that its history was too short to say they possessed the levers to get them to profitability.

• We did not see an S1
• We do not know how thry might have used that cash/stock
• We do know that being a public company would have required distractions such as building out the accounting, compliance, and Investor Relations departments, and so on.
• Institutional money would have been skittish buyers.
• The prospectus would have included pages of risks and cautionary statements
• Although Facebook had similar peril, Yammer did not have the chatter to drive retail distribution.
• Conversion from freemium is expensive, subsidized by the paying clients.

Yammer was blueprinted to be acquired by MSFT at any price. Yammer didn’t get in the business to operate it. They anticipated that getting to profitability or even distinguishing the product would be someone else’s burden.

Yammer overwhelmed MSFT with heavy marketing into the MSFT base of users and at the top charged the enterprise that Yammer users operated in. In that way it wasn’t ever really ‘free’ and and it made its early adopters stakeholders and enterprise wide evangelists.

MSFT was rolling out Surface, new Windows, New Office and dealing with significant phone/Nokia issues. Its resources were tremendous but spread thin. Yammer built itself to fight the MSFT ‘engagement’ battle.

The end?