Yammer Agrees to $1.2 Billion Sale to Microsoft: Report

After much rumor and speculation, Yammer has agreed to a $1.2 billion sale to Microsoft, according to published reports.

Yammer has agreed to an acquisition by Microsoft, according to a Wall Street Journal report citing a source familiar with the deal.

The report states that Microsoft will pay upwards of $1.2 billion for Yammer, which brings the power of social networking to the enterprise in a private and secure environment.

Rumors have been rampant that Microsoft was out to acquire Yammer, which is often referred to as Facebook for the enterprise. Yammer empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter decisions faster, and self-organize into teams to take on any business challenge, the company said in its marketing material. It is a new way of working that naturally drives business alignment and agility, reduces cycle times, engages employees and improves relationships with customers and partners, Yammer said.

Neither Microsoft nor Yammer would provide comment on the reported deal. And no information has been made public about when the deal will be announced or completed. However, the WSJ has reported that an agreement for Yammer to sell itself to Microsoft has been established.

Interestingly, Microsoft already has some technology that addresses the collaboration and social networking space in its highly successful SharePoint product. Yet many users view SharePoint as overly broad and may be looking for the kind of options that Yammer represents.

One avid Microsoft watcher, Mary Jo Foley at ZDNet touched on this:

"The lead-up to Microsoft buying Yammer sounds almost identical to the lead-up to Microsoft buying Skype. Think about it: Microsoft already has technology inside its SharePoint collaboration product that is focused on enterprise social networking. But that technology isn€™t lightweight and still has little recognition outside the SharePoint community. (In fact, Microsoft and Yammer announced a deal last year to add a Yammer Web Part to SharePoint to make SharePoint more €œsocial, mobile, and engaging for enterprise employees.€Yammer would be like Skype. In the case of Skype, Microsoft had its own homegrown VOIP technology, Lync (previously known as Office Communications Server) that did/does a lot of what Skype does. But Lync had/has zero consumer presence or brand recognition. So Microsoft shelled out $8 billion to buy technology that it is now working to integrate and differentiate from its own."

Yammer launched in 2008 and has raised more than $142 million in venture capital funding. The company boasts 200,000 customers and 4 million users, and claims 80 percent of the Fortune 500 already uses its technology.

Social business is a hot area of interest for major high-tech providers. IBM is investing heavily in its social business strategy and is leveraging its Lotus software platform to promote social networking and collaboration for enterprise business customers. And both Oracle and Salesforce.com have made recent acquisitions €“ of Vitrue and Buddy Media, respectively -- to bolster their positions in this space.

However, some see Microsoft as late to the party. As eWEEK reported earlier:

"Jonathan Yarmis, principal analyst with The Yarmis Group, agrees. "In some ways, it's about€¦time that Microsoft did this," he said. "The fact that they€™ve got to spend $1 billion [to add these capabilities] is in some ways an acknowledgement of a massive fail.""