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Microsoft To Acquire Yammer For $1.2 Bln.


Microsoft Corp. (MSFT) Monday said it has agreed to acquire Yammer Inc., an enterprise social networks provider, for $1.2 billion in cash. The acquisition of Yammer is expected to enable Microsoft adopt social networking along with traditional windows-based applications.

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

Ballmer added, "Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."

Yammer, which was founded four years ago, is casually known as the corporate clone of Facebook. Its services enable employees to join a secure, private social network, and also has file-sharing software and other tools. The deal is expected to add more social features to Microsoft Office.

Yammer offers its basic version for free, and customers can pay to upgrade their network to receive advanced administrative and security controls, integrations with enterprise applications. The company says it is used by over 200,000 companies worldwide, and that 80 percent of the Fortune 500 firms avail its services.

Yammer has raised $142 million in venture funding, with investors such as DFJ Growth, Charles River Ventures, Founders Fund and U.S. Venture Partners, as well as Max Levchin, co-founder of PayPal Inc.

The Yammer acquisition is Microsoft's biggest since Skype, which it bought last year for $8.5 billion. The Yammer transaction was quite expected as media reports last week suggested that a deal was in the offing.

Yammer will continue to develop its standalone service and focus on innovation and cross-platform experiences. Microsoft meanwhile intends to speed up Yammer's adoption alongside offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

MSFT is trading at $29.69, down $1.01 or 3.28%, on a volume of 27.4 million shares on the Nasdaq. In the past year, the stock has traded in a range of $23.79 - $32.95.

by RTTNews Staff Writer

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