By Adrienne Sanders, November 2, 2007
Socialtext has hired a new CEO and raised $9.5 million as the firm pushes deeper into the sizzling social software market.
The Palo Alto company makes social business software known as enterprise wikis, web-based documents people can view, edit and use to collaborate on projects. Such Web 2.0 goodies, including social networking tools and blogs, are going mainstream in the corporate world. Gartner Research projects the social software market will more than triple from $226 million in 2007 to $707 million by 2011. The Radicati Group pegs it at $3 billion by 2011.
"I'm happy with a little piece of that right now," said Eugene Lee, a former top marketing executive at Adobe and Cisco Systems, who will take over the big office on Nov.5. Socialtext co-founder Ross Mayfield will stay on as president and chairman.
The startup brought in "under $50 million" in 2007 revenue, Lee said. It is "targeting profitability," according to Mayfield's blog. Founded in 2002, Socialtext has raised a total of $14 million in three rounds, including the one announced this week, from notable investors including Draper Fisher Jurvetson, the Omidyar Network and SAP. Wikipedia founder Jimmy Wales is on the company's board of directors.
Socialtext will build its infrastructure and add roughly 25 employees to its 50-person workforce in the next year, including engineers and salespeople.
"We're not going to be doing any TV commercials for the Super Bowl," joked Lee, who was discovered by Socialtext after the company posted a search for "CEO 2.0" on social networking site LinkedIn and on Mayfield's blog.
The move was unusual in an industry that usually conducts such searches quietly and through executive recruiters. But Mayfield felt the openness reflected the nature of his business and candidates who would be suited to leading it.
Socialtext claims 4,000 customers including Symantec, which used the web-based social software to help speed up its integration with Veritas after it acquired the company in December 2004. "This was large-scale information sharing," Mayfield said. "Half the company didn't know about the other half's jobs, products or technology. So we created Sympedia."
Socialtext competes with a handful of corporate wikis and open source software vendors including Atlassian and Twiki. Last month, the Gartner Group bumped it into its so-called "Magic Quadrant", naming it among the best at offering a complete vision. And "we're behind only IBM, Microsoft and BEA in terms of ability to execute," Mayfield said. "I'm not saying we're going to take Microsoft out next year. But we've done a really good job in seeing where the market could go and in seeing where not a lot of others could follow."
Free 30-day Trial
Discover how easy it is to share expertise, ideas and data with colleagues in a secure, internal environment.
This paper is designed to help you focus on the areas that are most critical to success with social software, and to avoid the five biggest and most common blunders others have made when implementing social software for their organizations.