Microsoft Acquires Internet Startup Yammer for $1.2 Billion - The UpStream

Microsoft Acquires Internet Startup Yammer for $1.2 Billion

posted Sunday Jul 1, 2012 by Nicholas DiMeo

Microsoft Acquires Internet Startup Yammer for $1.2 Billion

It appears that Microsoft wants more than just a slice of the social networking pie. If you thought theirSo.cl project was the only social interest the company had, think again. Microsoft has purchased Yammer, an Internet startup company, for $1.2 billion. This is all an effort to bring more social networking features to not just So.cl, but to all of their business software. This is very similar to what we are seeing in the collaboration efforts with their Windows Live suite, Office 365 and the OneNote IE9 integrations.

What is Yammer and why did Microsoft want any part of the company, let alone the whole thing? Yammer's freemium business model focuses on private social networking. Employees of the same company can connect with each other and see what each of their coworkers have going on in their business lives. Essentially, it's Facebook for work. Microsoft's new acqusition will allow its sometimes fragmented business suite to finally be pulled together in some way.

Microsoft's CEO Steve Ballmer said to "think of Yammer as a fundamental part of our Office family," in a conference call this week.

For Yammer, the company will continue to operate out of its existing San Francisco office and will remain under the guidance of co-founder and CEO David Sacks. Yammer will also be offering its services independant from Microsoft's software, at least for now. Microsoft has yet to disclose when the deal will be finalized.

Their CEO said,

When we started Yammer four years ago, we set out to do something big. 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.

Will we see Microsoft regain traction against competition like Google Docs, a service that even though it is exponentially inferior to Office remains to grow? Microsoft has slowly been able to grow with their Internet-related services with the acquisition of Skype and changes to SharePoint and Office. Perhaps this will give them the push they need to stay competitive in the shifting market.

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