US firm Microsoft has announced its intention to acquire Yammer, a social network tool for enterprises, for $1.2bn. Launched in 2008, Yammer allows firms to set up a free secure, private social network, allowing them to communicate and deliver company-wide strategies.
It now has more than five million corporate users, including employees at 85 per cent of the Fortune 500 firms. Following the acquisition, the business will join the Microsoft Office Division, and will continue to report to CEO David Sacks.
“Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services,” said Steve Ballmer, Microsoft’s CEO.
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.
Camille Mendler, principal analyst at Informa Telecoms & Media, explained that the acquisition will be important for Microsoft in its efforts to support the bring-your-own-device (BYOD) movement, currently being seen in enterprises.
“For every device users bring in to the workplace, there’s also a social network that the user brings in as well. Acquiring Yammer will provide businesses better control of those social networks,” she said.
She explained that in certain countries, when an employee is communicating on a social network about corporate issues, the business is legally required to record that conversation.
“As people are using social networks more wherever they are, and using them on their mobile phone – then for Microsoft to provide a tool that is optimised for enterprises, such as Yammer – you can see why that would be attractive,” she added.
However, a problem facing Microsoft is that the competition is strong, with services such as Salesforce’s Chatter also on the market. However, as Microsoft also owns Skype, which is used by a lot of businesses, and Yammer is also integrated with Salesforce, and other relevant applications such as SharePoint, Microsoft is creating a platform to help enterprise users collaborate and communicate.
“Microsoft is very serious about enterprises, unified communications and collaboration,” said Mendler. “Office 365 is picking up steam, it has some very credible tools and Yammer provides another layer of functionality that Microsoft really should have been able to provide a while ago.”
The acquisition is subject to customary closing conditions, including regulatory approval.