Microsoft buys Yammer for $1.2 billion

The deal will boost the enterprise social networking capabilities in Office, SharePoint and other Microsoft collaboration products

Microsoft has agreed to acquire Yammer, a maker of cloud-based enterprise social networking (ESN) software, for US$1.2 billion [b] in cash, a deal rumored to be in the works for the past week and a half.

Yammer, which was founded in 2008, will continue to be led by its CEO David Sacks as it becomes part of Microsoft's Office Division, headed by President Kurt DelBene, Microsoft said on Monday.

ESN software provides Facebook- and Twitter-like capabilities adapted for workplace use, including employee profiles, activity streams, discussion forums, microblogging, wikis, idea generation software, joint document sharing and editing as well as tagging, rating and reviewing of content.

ESN products have become popular in recent years as tools that, when properly implemented and adopted, can improve the way employees collaborate and communicate, leading to increased efficiency and productivity, by complementing traditional applications like e-mail and instant messaging.

Yammer competitors include Jive Software, NewsGator, Socialtext and Tibbr. In addition to ESN specialists like Yammer, larger software vendors have also been adding ESN features to their broader collaboration suites and enterprise applications, including IBM, Oracle, Salesforce.com and Cisco.

With the Yammer software, Microsoft puts itself in a position to improve the ESN capabilities in its communication and collaboration products like Office, SharePoint and Lync, an area in which Microsoft has been seen as trailing competitors.

In its announcement, Microsoft didn't give specifics as to how it might integrate Yammer's technology into its products. Microsoft said Yammer will continue to develop its software, maintaining "its commitment to simplicity, innovation and cross-platform experiences." Microsoft will also work to accelerate Yammer's adoption in conjunction with complementary Microsoft products like SharePoint, Office 365, Dynamics and Skype.

No timetable was given for the closing of the deal, which is subject to regulatory and other approvals. News of a possible deal between Microsoft and Yammer emerged on June 14, when, citing anonymous sources, Bloomberg reported that Microsoft was in advanced talks to acquire Yammer for about US$1 billion.

Yammer's software is used by more than 5 million corporate users and in more than 85 percent of the Fortune 500 companies. It offers a basic free version of its software, and three fee-based tiers. Yammer, which has raised $142 million in funding, has about 300 employees.

Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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