Yammer, the Twitter for businesses, crosses 1 million users

Yammer, a status update tool for businesses, said it crossed 1 million users today and added that the number of paid users has grown by more than 57 percent from the first quarter of this year.

Sometimes called Twitter for business, Yammer is an internal social network that lets co-workers and teams share what they’re working on continuously. More than 70 percent of Fortune 500 companies are working with it now and overall, the company has about 80,000 companies and organizations using it.

The company, founded by serial entrepreneur and former PayPal chief operating officer, David Sacks, launched two years ago. It works on a freemium model — it’s free for a basic account, but if a business wants more like security controls and custom branding, they’ll have to pay anywhere from $3 to $5 per user per month. Yammer added that all companies with paid contracts that have come up for renewal have continued using their service.

Yammer is one of a handful of startups that launched two years ago that have been able to scale based on a freemium model. We covered another one last week called Evernote, which has more than 3 million users and charges $5 a month for premium service.

Yammer has raised about $15 million in two rounds of funding.