Microsoft Corp. on Monday announced a $1.2 billion agreement to acquire Yammer, a provider of enterprise social networks. Yammer will join the Microsoft Office Division.
Launched four years ago, Yammer builds on the Facebook and Twitter models by bringing social networking to companies.
The software-as-a-service provider, based in San Francisco, reports serving about five million corporate users, including employees at more than 85 percent of the Fortune 500. Yammer says on its website it is designed for business functions such as company collaboration and file sharing.
"Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services," Microsoft CEO Steve Ballmer said in a statement.
The Yammer acquisition reflects a broader trend to bring social networking into the workplace, said Ovum principal analyst Richard Edwards in a statement.
"Many employees at the junior (and now senior) end of the workforce live aspects of their personal lives through Facebook and Twitter, so the idea of introducing similar kinds of tools into the workplace seems to make sense from a communication and collaboration point of view," Edwards said. "It's not just Microsoft eying-up opportunities afforded by the Facebook-led social paradigm shift. Established enterprise IT vendors, such as IBM, Oracle, Salesforce.com, and SAP, are all busy bringing social capabilities to the workplace via a variety of ways and means."
Microsoft's purchase, though, may be too late to make an enormous impact. "Microsoft is too late to the social party," Global Equities Research analyst Trip Chowdhry wrote in an email Monday, the San Jose Mercury News reported. "Imitation is not a strategy."
Yammer has raised a total of $142 million, and recent customer wins include Engine Yard, Manhattan Associates, NetSuite, Renaissance Insurance, Twinings and the Westfield Group in the United States and United Kingdom.
Microsoft said the acquisition is subject to closing conditions including regulatory approval.
