Microsoft purchases Yammer for $1.2 billion

It's official, Microsoft has purchased Yammer and below you can see the press release that just went live on Microsoft's press site. The Yammer acquisition is not all that surprising as information about the potential purchase hit the Internet a few weeks back

According to Yammer, the service is used by more than 80% of Fortune 500 companies which would appear to be the reason why Microsoft is interested in the company. For Microsoft, they will gain another product that is deeply linked within all of the major companies around the globe and Yammer will get a boatload of cash, a win-win for both companies.  

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.
Of course, with a purchase this big, Microsoft will be subject to regulatory approval. If all of that goes smoothly, Microsoft should be able to close the deal rather swiftly. 
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16 Comments

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So a user base of 5 million is worth 1.2Billion bux?

I'm going to get to work on my own social networking site. I'll call it "Stammer".

Beofre today, I never heard of Yammer. Likely because our company si too small. We use Lotus Notes and it has its own built-in solution.

If MS integrates this into Windows 8, Windows Phone and maybe even Xbox, that could be HUGE.

Microsoft is overvaluing these companies too much.. Skype: $8.5B, Yammer $1.2B... so they roughly spend $10b for what? My company doesn't spend a penny more than it did under previous ownership, and are even looking to reduce spending, not increasing it. I hope Steve B. knows what he's doing, otherwise it would be the most wasted investment in any company's recent history

vhaakmat said,
Microsoft is overvaluing these companies too much.. Skype: $8.5B, Yammer $1.2B... so they roughly spend $10b for what? My company doesn't spend a penny more than it did under previous ownership, and are even looking to reduce spending, not increasing it. I hope Steve B. knows what he's doing, otherwise it would be the most wasted investment in any company's recent history
Unless Skype collapses, I would say that the purchase--and immediate fall--of Palm fills that slot at an identical $1.2 billion.

I will say that Yammer sounds overpriced since I had never heard of them until hearing the rumors of their purchase. And I work at a Fortune 50 (sic) company.

Oh my. By doing this deal, Microsoft are pretty much guaranteed to have the stronghold on the business sector. As Brad and Aletheia said, once correctly integrated with the correct software (Office/Skype), the implications will be huge.