Facebook puts workplace social networks on notice

So far, some 450 firms have signed up to try out the new platform


By Jennifer Saba

NEW YORK (Reuters Breakingviews) — Facebook is hoping to win new corporate friends. Mark Zuckerberg's US$300 billion social-networking giant is rolling out a separate platform for businesses informed by what it has learned from its 1.6 billion members. Microsoft's Yammer, hip messaging provider Slack Technologies and the likes of Jive Software have been put on notice.

So far, some 450 firms including the Royal Bank of Scotland , the Financial Times and Heineken have signed up to test Facebook at Work. The demand to be a guinea pig was high: some 60,000 companies applied. The stampede is hardly a surprise given that the typical corporate intranet website looks like it could have been created by Yahoo in 2003, with intuitiveness to match.

Zuckerberg's work accounts feel much like personal Facebook pages. Employees can organize activities, participate in sub-groups, chat and read pertinent news. There is an auto-translate function for global firms. Security is treated differently, of course. Facebook doesn't own a company's data, and nor does it serve ads to corporate clients. In the case of the Royal Bank of Scotland, the bank maintains its own storage in case regulators come looking for past communiqués.

There's an interesting comparison. For years, BlackBerry had a lock on the business world because it claimed its devices were more secure than Apple's iPhones. But it proved only a matter of time before corporate procurement departments relented and BlackBerry's clout dwindled. Facebook now wants a piece of enterprise social networking.

Jive, worth less than US$300 million, has suffered a nearly 90 per cent share-price slump since its April 2012 peak as revenue growth has slowed with little sign of profitability. Microsoft shelled out $1.2 billion for Yammer in 2012 but the software giant's dominance of enterprise computing weakens every year. Slack may be the exception, potentially raising funds at a valuation of up to US$4 billion, according to Bloomberg News.

But even the new kid on the collaboration block won't be able to shrug off Facebook's arrival. If the companies behind today's employee networks want to keep up, they'll have to make the experience of logging into internal websites much more likable.


Latest stories