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Official: Microsoft buys Yammer for $1.2 billion to boost cloud services

WP Central

On June 14th, rumors were circulating that Microsoft was poised to buy Yammer, a social-network and messaging service for enterprise, for at least $1 billion dollars. Speculation cooled down a bit as Microsoft intended to focus on the Surface and Windows Phone 8 announcements but a new week is upon us and so the deal is now official.

Microsoft has now purchased Yammer (www.yammer.com) for a massive $1.2 billion in cash and it will be folded into the Microsoft Office Division, led by division President Kurt DelBene. The team will continue to report to current CEO David Sacks to maintain continuity, at least for the near future.

A statement from Microsoft on the acquisition states

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love. Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

Yammer is only four years old but has nearly 5 million users including employees at 85 percent of the Fortune 500, making it an interesting and strategic purchase. So why the acquisition even though Microsoft has Lync and Sharepoint already? Mary Jo Foley (ZDNet) ruminates that Microsoft "...needed a cooler brand and wanted the cross-platform support" which sounds about right to us.

Here's to hopefully seeing Yammer built into Windows Phone 8.

Full press release after the break...

 

Microsoft to Acquire Yammer
June 25, 2012
Microsoft extends cloud services with best-in-class enterprise social networking.

REDMOND, Wash., and SAN FRANCISCO — June 25, 2012 — Microsoft Corp. and Yammer Inc. today announced that they have entered into a definitive agreement under which Microsoft will acquire Yammer, a leading provider of enterprise social networks, for $1.2 billion in cash. Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and the team will continue to report to current CEO David Sacks.

“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, Yammer now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500. The service allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative.

Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

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

The acquisition is subject to customary closing conditions, including regulatory approval.

About Yammer

Yammer (www.yammer.com) is a leading provider of enterprise social networks with over 5 million verified corporate users including employees of more than 85 percent of the Fortune 500. The basic version of Yammer is free, and customers can pay to upgrade their network to receive advanced administrative and security controls, integrations with enterprise applications, priority customer service and a designated customer success manager.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.

Forward-Looking Statements

This press release contains forward-looking statements, which are any predictions, projections or other statements about future events. Actual results may differ materially from these forward-looking statements because of a variety of risks and uncertainties about our business, which we describe in our filings with the Securities and Exchange Commission, including our Forms 10-K and 10-Q. We do not undertake any duty to update any forward-looking statement.

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Comments

There are 30 comments. Sign in to comment

xmarklive says:

Doesn't it seem like Microsoft is buying alot of companies, and are expected to buy even more.

blackprince says:

Not like in the 90's though.

rceballos10 says:

You have to remember MS was on probation for 10 years, so they couldn't buy anything. Now, it's back to business.

timwp12 says:

So what's wrong with that. Don't be jealous just because windows phone 8 is the best

scdkad says:

The founders of yammer are celebrating today!!

venetasoft says:

Well done Microsoft!! Next will be Nokia I think ;)

They already said they weren't buying Nokia...for now anyway as they are "already getting everything they want" from them. Would be interesting to see though.

toby@wp says:

Maybe not Nokia, but it could be RIM

briangk_77 says:

Seems expensive per current user ($240 per user if the numbers are right). Obviously a long term strategic play.

Aesirus says:

This will likely be incorporated into Microsoft Dynamics in some way; companywide social networking is something some of MS's competitors have already implemented.

pallentx says:

Does anyone care about "enterprise social"? We have salesforce chatter at work - no one uses it. I'm assuming people at MS know something I dont - hope this turns out to be worth the money. 

I totally agree and I work in our IT Department at DeVryInc. We literally have to force employees to use chatter to stay updated on IT issues etc. They don't care to use it and I for one feel the same way. Well, I say hats off to MS & Yammer!!! Hopefully they can put some spice in the enterprise social networking scene. :-)

rceballos10 says:

With 500 mil users... Someone is using it.

CJ Thunder says:

I am an auto G+ 'user', if you know what I mean?

threedog says:

I know what you mean ;)

hammerhand says:

I'm pretty sure big companies use it, or something like it. I remember my friends at Northrop and Lockheed have talked about IM programs their companies use. I'm sure a big part of that is security, too. Secure, cross country or globe IM.

phirefly says:

Awesome, now they can come back with BackOffice featuring FaceLync :) Unless it's already taken by the adult film industry.

myjota says:

But anyway yammer cost for me 1 dollar

ejlee072006 says:

I see what MSFT is trying to do...hmmmmmm

kallemia says:

"Here's to hopefully seeing Yammer built into Windows Phone 8.".... 
Because we know we won't see it in 7.8.... 

ThePKReddy says:

Terrible move

dubbin_irie says:

Something like this will definitely enhance interoperability for projects. From a stand point as a project manager this will really enhance communication between divisions if used properly

lippidp says:

How many different ways to communicate do we need at work?

el.mero.mero says:

Useless comment, just continue to keep track of the best buy sales

lemonsteveo says:

Seems like a better deal than instagram

Dethzilla says:

What the heck is Yammer?

schlubadub says:

Learn to read. The article goes into great detail about it.

dermotf says:

I really like Yammer and I think this is a great move by MS.

toby@wp says:

1.2 billion? It seems to me that money completely lost its value.

HD7guy says:

This fills a gaping hole that SharePoint, Office Communicator/Lync, and email didn't fill. Good move on Microsoft's part. BTW, there is a Yammer app for WP.