Confirming rumors that have been circulating since Jun 14, Microsoft announced its plans to acquire the enterprise social networking site Yammer for $1.2 billion.
After more than a week of rumors
Microsoft and Yammer confirmed June 25 that the software giant will acquire the
enterprise social networking site Yammer for $1.2 billion.
Yammer will remain a standalone business led
by its current CEO David Sacks and operate within Microsofts Office division
headed by its president, Kurt DelBene.
Microsoft CEO Steve Ballmer remarked that the
way Yammer built its customer base of 5 million usersvirally at first as individual
employees started using it before it was embraced by corporate IT departmentsreflects its strength.
He also said that while Yammer will remain a
standalone product, it will also be integrated with Microsoft products such as
Office 365, Microsoft Dynamics for ERP and CRM software, as well as its
recently acquired Skype voice over IP service.
This an important part of the communication,
collaboration, productivity and social networking offering from Microsoft, both
as adopted by IT and now, with the Yammer acquisition, as adopted virally,
said Ballmer, during a conference call to discuss the acquisition.
Yammer's service is used by employees at 85
percent of the Fortune 500 firms. It allows employees to join a secure,
private social network for free and then makes it easy for companies to expand
the service, with premium services, as strategic initiative for their
Sacks, who co-founded Yammer in 2008, said
the acquisition by Microsoft will be a great step forward for the growth of
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 well need to scale
and innovate, said Sacks, who was also on the call.
The Microsoft acquisition of Yammer is just
the latest in a series of acquisitions of enterprise social networking
companies by major IT companies just in the last month.
Salesforce.com acquired Buddy
for close to $700 million to
complement its existing Chatter social media platform. Oracle added Collective
to its portfolio of social media-related acquisitions. SAP acquired Ariba
for $4.3 billion, although thats more of a collaboration company than
enterprise social media. However, many of these platforms combine collaboration
(a la Microsoft Lync/SharePoint) with social media (a la Facebook). VMware
announced a new pricing strategy for its Socialcast
enterprise social service, offering a full-featured suite of services free for
up to 50 users.
Sacks said that Yammer, as a part of
Microsoft, will be competing in a very dynamic market as companies realize the
business benefits of social media to collaboration and communication. Besides
the companies mentioned above, other standalone providers include Jive, Moxie
Sacks said Yammers office will remain in San