Should CoTweet and Yammer Be Worried?

Some of the big tech news this past week included two announcements. First, Salesforce announced that they will be offering a “stream” product in 2010. Second, the Twitter COO finally publicly noted that advertising and paid accounts will be coming to Twitter soon.

I’ve had several discussions and nearly every time the names of two startups are brought up as potentially in trouble with last week’s announcements. CoTweet describes their service as, “team workflow for Twitter” and Yammer is basically an internal copy of Twitter. CoTweet could be in trouble because of Twitter and Yammer could be in trouble because of Salesforce. Let’s take a look at why…

We first covered CoTweet earlier this year when they presented at the NY Tech Meetup. After the demo, I mentioned to the founders that I was concerned that Twitter could copy their features and leave them high and dry. CoTweet is going to have to work even harder to stay ahead of Twitter in terms of service offerings and continue to add value since we know that Twitter will soon be offering accounts that will seem very similar. Earlier this month CoTweet announced paid plans starting at $1,500 a month. CoTweet is still in private beta and my guess is that they will slowly morph into a Twitter consultancy. I’m not sold on that model either as Twitter might be headed into the land of fad. My first suggestion would be a name change so that they can easily branch out to serve other services including Facebook, MySpace, etc.

Yammer is a different story in terms of competition. When Salesforce announced their plans to launch a corporate stream product next year named Chatter, many noted that Yammer was instantly in trouble. I’d suggest if anything Yammer will be in an even better position than before because so many reviews and commentary about Chatter will include links and notes about Yammer. Chatter will apparently be included free for some Salesforce users and $50/user for other users. Yammer comes in much lower at $3-5/user/month.

The other element that Yammer has in their favor is that it works for techies more than Salesforce does/will. Having worked in the corporate world for enough years, I can’t picture the IT teams inside large companies using Chatter for communication. Many tech organizations are looking for ways to share knowledge inside the company although I am not sure that Chatter will provide an answer to this need. Honestly I’m not sold that either product will see massive take rates although Yammer will do better with tech groups and companies while Chatter will do better with sales organizations.

You might be wondering why I haven’t included FourSquare or the Twitter desktop clients (Seesmic/Brizzly/Tweetdeck/etc.) in this conversation. FourSquare is the hot product among the 20-yr old bloggers and that will keep their buzz stream going, at least in the short term. FourSquare also has investors who are also investors in Twitter so perhaps that will keep the scope creep further away. Lastly, I would guess that Twitter will acquire FourSquare by the end of 2010.

The Twitter desktop clients will soon be in a similar position as CoTweet. One of the apps will be acquired by Twitter in 2010 and my guess is that it will be Seesmic for an undisclosed amount.

In one of the earliest posts on CenterNetworks, I discussed  the concerns with building completely on top of another company’s technology. The post centered around Flock but it works today as well. And then we have Twitter which is slowly morphing into Friendfeed.