Yammer – what twitter should be.

Yammer, an internal communication tool for companies, won the top prize at TechCrunch50, crowned the winner. The event recognizes startups with merit; the company was given a check for $50,000 to grow its business model.

Yammer’s micro-messaging system is essentially Twitter for businesses. Less formal than a corporate intranet, it enables employees to communicate casually in real-time on a public forum. (That is, everyone can see what everyone else is saying.)

Registering on a Yammer network requires a company email. A company network is set up, where co-workers can share status updates, post news and links, ask questions, and provide answers to others in their firm.

Unlike Twitter, which asks users to answer the question “What are you doing?”, Yammer asks, “What are you working on?”

yammer-screenshot.jpg

Former PayPal executive David Sacks — who produced the movie “Thank You for Smoking” — traced the birth of Yammer to his own company’s frustrations. Geni, a startup of 30 employees, was struggling to stay connected.

“We looked for something like an enterprise version of Twitter, and finding nothing like that, we decided to build it ourselves,” he told conference attendees. (See video.)

As it turned out, other companies felt the same way. Some 10,000 people and 2,000 organizations signed up for the service the first day it launched, TechCrunch reported.

Reviews so far have been enthusiastic. Some, however, critique the model as just another Twitter knock-off, destined to fare as poorly as predecessors. A Tony Gigov cartoon on Pink-Sheep.com blithely asks, “Why Yammer, when I can Twitter?”

Like Twitter, Yammer enables mobilization of its service through apps for different mediums and spaces: both iPhone and Blackberry are able to support a Yammer app, and an optional desktop extension — which ports Yammer content into an instant messaging format — is Adobe Air. (Another app, twhirl, does the same thing for Twitter.)

But perhaps the biggest difference between Yammer and Twitter is the fact Yammer has a business model.

It’s free for employees, but companies must pay to “claim” their network and gain administrative control. Admins can remove messages and users, set password policies, and fix IP ranges for users. The cost is $1 per employee per month after a free three-month trial period.

The TechCrunch50 award includes $50,000 in cash and a landslide of media attention — which typically leads to additional funding. Last year’s winner, Mint.com, went on to nab $17 million in venture capital and now claims to be the world’s largest personal finance website, writes the LA Times.

Twitter received venture funding of approximately $1-$5 million in July ’07. Its market share of visits has grown 500 percent year-over-year since that time.

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