Forget Facebook, Microsoft Nabs Yammer $1.2Bn

Software giant buys the ‘Enterprise Social Network’

Microsoft announced a definitive agreement to acquire Yammer, for $1.2 billion in cash.

The deal was flagged several weeks ago, although a far higher price tag of $12bn was reported.

Yammer allows instant messaging between employees, is a “private” social network and would be an important weapon against the might of messaging services from Google and even Facebook.

Microsoft says it plans to “accelerate Yammer’s adoption alongside Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.”

Yammer will continue to develop its standalone service and its commitment to cross-platform experiences, Microsoft said in a statement.

Yammer will be absorbed by Microsoft’s Office Division, led by division President Kurt DelBene.

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

“Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

Launched in 2008, It currently has five million users in over 200,000 organisations in the three years (including 85%of the Fortune 500).

Major corporate users include Deloitte, Ford, Nationwide, 7-Eleven, Orbitz Worldwide and Telefonica O2. And Yammer has a few things in common with Facebook – both the Enterprise and Network share the same first investor, Peter Thiel.

“When we started Yammer four years ago, we set out to do something big, said David Sacks Yammer CEO, who says “joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

The acquisition is still subject to regulatory approval, however.

Yammer was named “Innovative Application Software Company Under $100 Million to Watch,” by analysts IDC last year.