Microsoft purchases corporate social network Yammer for $1.2 billion

By on June 26, 2012, 8:30 AM

Microsoft has pulled the trigger on a deal that will see them acquire corporate social network Yammer in an effort to keep pace with other similar offerings. As rumors earlier this month suggested, Microsoft has agreed to pay $1.2 billion for the four-year-old start-up founded by former PayPal chief operating officer David Sacks, who will remain with the company as chief executive officer.

Yammer, sometimes referred to as the Facebook or Twitter of the business world, was originally conceived with the idea that employees could post a short description of a project they were working on for others in the company to follow and offer ideas. It has since evolved to include a wider range of social networking features to facilitate file sharing, knowledge exchange and team efficiency. The service boasts around 5 million users spanning more than 200,000 companies worldwide., Google, Oracle and SAP all have extensive corporate social network offerings and it’s clear that Microsoft wants to compete. Trip Chowdhry from Global Equities Research believes that Microsoft is too late to the social party, noting that it’s impossible to get into a leadership position by imitating the leaders. He feels that Redmond will have a tough time trying to catch and Oracle, both of which have beefed up their offerings in recent years.

Regardless, Jive CEO Tony Zingale feels that the acquisition solidifies the idea of corporate social networking and will likely lead to it becoming a must-have business tool.

User Comments: 6

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lawfer, TechSpot Paladin, said:

I think there's more to this acquisition than what most people think. Or at least that's what I hope, since 1.2 billion dollars a is a lot of money to just play catch up. Something tells me there really was a very good reason for the purchase.

spydercanopus spydercanopus said:

Seems like microsoft could have saved a billion dollars by adding a forum feature to Sharepoint. What a waste.

Xyvis said:

It's almost as if Microsoft is just gobbling up other companies at this point just to stay afloat (if that makes sense). To me it seems as if they're running out of ideas so they are buying out others to try and keep up.

gamesms gamesms said:

Wow.. that's interesting.. windows 8 and yammer...could they break Facebook? As bling a partner with... :/

DanUK DanUK said:

I like this and really hope that a big company like microsoft can use their resources to promote the benefits of "social" networking tools in the work place.

My last and current job have both been for FTSE 100 companies and as they're both quite "old" (both literally and in leadership attitude towards this sort of thing), neither have anything like yammer. Just good old email/phone/IM. Feels like a missed opportunity, I hope they catch on soon.

Guest said:

"social networking" is getting old. Too late M$

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