Yammer, Chatter, Hot Water

Managers have long been advised to think twice before putting something embarrassing or incriminating in an e-mail, and yet the informal nature of the medium often makes for blunders. Now companies are grappling with technology that encourages even more casual communication: social networking and collaboration software offered by IBM (IBM), Salesforce.com, Yammer, and others.

Advocates of the technology say it allows global workforces to stay in touch, letting employees discuss customers, internal politics, research projects—really, just about anything. Though the services are similar to Facebook or Twitter, the conversations are typically restricted to insiders. Revenues for the sector are expected to climb 16 percent this year, to $769 million, according to researcher Gartner, which tracks some 80 companies that offer such services, either as stand-alone software packages or online subscriptions. "E-mail requires an active response," says David Sacks, chief executive officer of Yammer, a three-year-old startup in San Francisco that says it provides social-networking software to 100,000 companies. When using Yammer or its rivals, "you don't have to wait for someone to send you something. You can find it on your own." Sacks touts the applications as a way to foster camaraderie and loyalty, citing research by tech consultancy Deloitte Digital that showed almost no turnover among its employees who use Yammer frequently.