Following rumors, Microsoft Corp. paid $1.2 billion in cash to buy Yammer Inc., a provider of social networking software for businesses and institutions. The agreement was made public yesterday. “The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Microsoft’s CEO Steve Ballmer in a statement. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”
Yammer founder and CEO David Sacks said in a blog post that he was pleased to announce that the company had signed a definitive agreement to be acquired by Microsoft. “After the close of the deal, Microsoft will continue to invest in Yammer’s stand-alone service, and the team will remain under my direction within the Microsoft’s Office Division,” he said.
Yammer will join the Microsoft Office Division, led by division president Kurt DelBene with the team reporting to current Yammer CEO David Sacks. Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.
As noted by Richard Edwards, principal analyst at Ovum, Microsoft has to address the needs of employees who are increasingly living their personal and work lives through social media. “So the idea of introducing similar kinds of tools into the workplace seems to make sense from a communication and collaboration point of view,” Edwards said.
“Microsoft’s acquisition of Yammer will undoubtedly have an opportunity impact at the commodity end of the enterprise social networking spectrum, but if Google and LinkedIn can address this aspect of the market with a compelling proposition then all is still to play for,” he added.
Launched in 2008, Yammer now has more than 5 million corporate users, including employees at 85% of Fortune 500 companies. Sacks noted that when he and Adam Pisoni started Yammer they set out to do something big. “With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users,” he said.
Forrester Research recently ranked Yammer as one of the three top enterprise activity streams (social software products anchored around the stream or feed of posts) along with Salesforce.com’s Chatter and Tibco’s Tibbr.
The acquisition is subject to customary closing conditions, including regulatory approval.
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