Microsoft buys social site Yammer in $1.2 bn deal

Today Microsoft announced officially that it is set to acquire start-up social site Yammer in a $1.2 billion (£770 million) cash deal. 

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Microsoft 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.”

The acquisition of Yammer is Microsoft’s largest in the company’s 37-year history, since it spent $8.5 billion to acquire web chat service Skype Communications in May 2011. Microsoft said the acquisition is subject to regulatory approvals and other customary closing conditions.

Yammer is a closed social network for enterprises that facilitates communication between employees. The four-year-old enterprise social network provider now boasts more than five million users, including employees at 85% of the Fortune 500 such as Ford Motor, Deloitte, Shell and Ebay. The service is often described as a “Facebook for business.”

Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive in a bid to remain competitive over its internet presence with Google. Microsoft has said it will use Yammer’s technology to power collaboration experiences in Office 365 in the future, adding social features, which is similar to those found in Google Docs, to the software. 

“I picture people being able to use Yammer to manage and expand their professional relationships, share and collaborate on Office documents, stay informed about content updates, and to seamlessly move from status updates and feeds into voice and video conversations,” said Kurt DelBene, president of the Microsoft Office Division, in a blog post. 

“When we started Yammer four years ago, we set out to do something big,” Sacks said. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.” 

Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and the team will continue to report to current CEO David Sacks, a former PayPal executive.

Queenie Man