Putting an end to the rumors, Microsoft officially announced it has bought Yammer for a whopping $1.2 billion price tag.
Continuing in its San Francisco location and managed by CEO David Sacks, the company will be blended into the Microsoft Office Division.
“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Microsoft CEO Steve Ballmer in the release. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”
Launched in 2008, Yammer currently has more than 5 million corporate users that include 85 percent of the Fortune 500. The company provides a microblogging platform that allows employees to collaborate on a secure, private social network for free.
The sheer number of users offers an advantage over Sharepoint, Microsoft’s own collaboration tool that has struggled to build a wide user base. The deal makes sense for Microsoft, as it widens its social networking potential which had been struggling.
Microsoft, however, has been known to purchase large acquisitions that struggle to justify their enormous price tags. The company is only beginning to take advantage of its $8.5 billion purchase of Skype, and it remains to be seen if Skype can offer a superior communication experience that’s contingent to Microsoft.
Likewise, some have questioned Microsoft’s timing of the Yammer acquisition as well as the price and doubt whether Microsoft will be able to make up the social networking ground its already lost to competitors such as Salesforce.com.
“Microsoft is too late to the social party,” Trip Chowdhry, managing director at Global Equities Research, told USA Today. “You cannot get into a leadership position by imitating the leaders. This is a non-event for Microsoft and for the industry.”
For Yammer, of course, a $1.2 billion check makes great news, as is the chance to become part of Microsoft’s empire.
“When most people thought social networking was for kids, we had a vision for how it could change the way we work,” Sacks wrote in his blog discussing the deal. “Four years ago, we started paddling out to catch the wave that we’re riding today. With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users.”