Microsoft's acquisition of Yammer last week was simultaneously praised for potentially adding social features to Microsoft's enterprise software while panned for its perceived value for the company. It is always difficult to debate the sale value (currently quoted at $1.2 billion), but the acqusition seems to make sense for Microsoft, which wishes to add a social dimension to many of its products like SharePoint.
Less discussed has been the question on my mind: where was Google?
Development started on Yammer in 2008, and the enterprise social network was already well on its way to success by the end of 2010. At the same time, Google was re-conceiving its social network strategy in the wake of the failed Google Wave and Google Buzz products. What emerged from those discussions was the model for the current Google+ Circles concept, which was originally developed by Paul Adams.
The goal of Google+ is, and remains, simple: add a social dimension to all of Google's products, while protecting Google's market share in search against competitors. In the past decade, the patina of the open web has been slowly chipped away by the growing use of "walled garden" websites. Websites and their content were once freely open to all, but today, web start-ups are increasingly roping off content to control its distribution and acquire information about users. For Google, this pattern not only degrades the experience for its users, it also makes search much less useful. A social layer like Facebook is critical for Google's long-term success, but since Facebook doesn't make its data public, Google had to acquire the data ab initio.
When I arrived to work at Google last summer, I witnessed the final hectic weeks of the launch of Google+. What some other PM interns and I couldn't understand then (and we discussed this several times) is "why would I use this instead of Facebook?" And that has been the problem all along with Google+: the value proposition to the user is just not there. Few (real, normal) people have time for Facebook, let alone two full-fledged social networks at the same time.
Side note: There was much hope at the time at Google that the public's complaints about security on Facebook would lead to a mass exodus when an alternative was created. This is one of those cases where you can't listen to users too closely: few people seem to truly care about security enough to leave Facebook. User experience is very important, and ultimately, people rated their experience more important than their privacy or security.
The consensus among my close group of friends was this: why did Google keep trying to create an all-encompassing social network instead of starting with something more specialized and generalizing it? And this is where Yammer fits in. Yammer offers a product to create private social networks to companies, along with groups with selected members (sort of like Circles, except shared). Such a product could be combined with Google's productivity suite in amazing ways -- think Google Docs and a clean sharing layer, plus Calendar, GTalk and Gmail. That is a really nice value proposition.
I understand this is a tough strategy. Google needs a "fun social" layer, not a productivity one. Converting from the walled model of Yammer to a more general purpose social network would not have been easy. Compared to Google+ though, it might have a lot of users -- and ultimately, that is the most important point. Once you have users, you can slowly transition them to a very different experience.
Google is an ambitious company with the necessary wallet size to make big ideas happen. In this case, it should have directed its resources to acquiring Yammer as the basis for a new "productivity" social network, and built out from there. Why Microsoft figured that out before Google is anyone's bet.