Microsoft agrees $1.2bn deal for Yammer

 

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By Reuters

Posted on 26 Jun 2012 at 08:36

Microsoft has agreed to buy online social network firm Yammer for $1.2 billion in cash, in a move that brings internal social networking tools to its corporate customers.

Talk of a deal had circulated earlier this month, but the two companies have finally confirmed an agreement.

Four-year-old Yammer, which boasts five million users of its private, in-company networks, helps companies' internal communications and collaboration by allowing employees to form groups and interact with each other freely. Companies such as Ford, Deloitte and us here at Dennis Publishing are customers.

The 400-employee firm will keep its headquarters in San Francisco but will become part of Microsoft's Office unit under Kurt DelBene in Seattle. Yammer will still be led by current CEO David Sacks, a former PayPal executive.

This acquisition will immediately make Microsoft a strong competitor in the enterprise social market

The service should fill a growing gap that Microsoft was struggling to fill with its SharePoint application for creating private websites for intra-company projects. "This acquisition will immediately make Microsoft a strong competitor in the enterprise social market," said Larry Cannell, an analyst at tech research firm Gartner. "It was a stretch to call the capabilities in SharePoint's MySite feature a social network site."

With Yammer, employees can use a private, online company directory to contact co-workers, form networks, chat, share links and post news. A basic version of Yammer is free, but a subscription buys more security and integration with other company-wide software.

Internal networking for companies has attracted other big tech companies such as Cisco, which has a similar offering to Yammer called WebEx Social, and IBM with its Connections.

Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive and attractive to its core corporate users and home consumers, and has even been experimenting with its own social network called So.cl.