Microsoft in $1.2 billion Yammer deal

Tue 26th of June 2012, filed under Social Media

'Facebook for businesses' to become part of Office

Microsoft has acquired business social networking site Yammer for $1.2 billion (£770 million).

Predictions had surfaced about the deal earlier in the month, but now it has been officially confirmed that Yammer is to be incorporated into Microsoft Office as part of the company's bid to fend off competition from Google. Microsoft's move comes a year after it bought video messaging company Skype for $8.5 billion, the most expensive purchase in its 37-year history.

Four-year-old Yammer has already made $142 million in its own right, providing a 'Facebook for businesses' service that allows employees within a company to interact with each other at work. It is already in place at large organisations such as Deloitte, Ford and eBay.

Yammer CEO David Sacks, also known for founding online money transfer service PayPal, said: "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".

Microsoft Office v Google Apps Suite

Microsoft will hope that by adding a further dimension to its Office package it will provide a welcome boost to the feature that provides around half its revenue.

Google has been posing a serious threat to Office with its web -based workplace tool, Apps Suite. A year ago, it released a list of reasons why users should try Google Apps Suite over Microsoft Office, chiefly that it was accessible online, easy to use and geared more towards teamwork than individuals.

However, Microsoft CEO Steve Ballmer remains confident that with Yammer on board the company is in a good position to deal with Google's competition. "The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love," he said.

Daniel Nolan, managing director at theEword, said: "Yammer has enjoyed a great deal of success in a short time, so it's no surprise that its product was in demand. It's good for Microsoft that the company has another feature to offer, now let's see how it will integrate in Office."

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