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You are here: Home / CRM Systems / Microsoft-Yammer May Be Done Deal
Microsoft $1.2B Acquisition of Yammer May Be Done Deal
Microsoft $1.2B Acquisition of Yammer May Be Done Deal
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Mum is still the word from Yammer and Microsoft. But The Wall Street Journal is reporting that Redmond bought the business social networking company for $1.2 billion despite no formal announcement Friday.

According to the Journal, it is unclear when the Yammer acquisition will be formally completed and announced. Microsoft was not immediately available for comment and a Yammer spokesperson told us the company doesn't comment on rumors and speculation. But online tech media are ablaze with news of the deal as if it was done.

A Pain in Microsoft's Rear?

In a Forbes column, Rob Koplowitz, vice president and principal analyst at Forrester, said if the rumors were true, David Sacks, CEO of Yammer, is about to have a very happy 40th birthday. Koplowitz said the $1 billion number being bandied about is not an Instagram moment.

"The value and potential of Yammer in the Relevant Products/Services software market is clear. David and team have been working very hard for a long time to build a viable enterprise business. They were recently named a leader in Forrester's Activity Stream Wave," Koplowitz said.

"They have one million paying enterprise customers and another four million freemium users in the wings. It's a real business and it's been a real pain in the backside to some larger and better established competitors. In the case of Microsoft, a much larger and much better established competitor."

A Cheap Buy?

We caught up with Charles King, principal analyst at Pund-IT, to get his thoughts o the rumors. He reminded us that the conventional wisdom around acquisitions is to measure the cost of buying an established tool with an established audience to complement current products against the cost of building similar technology in-house.

"We are in the midst of a major shift. The concept of collaboration, or what you might call network enhanced tools are changing the way people work," King said.

"Yammer is an enterprise-focused toolset that falls very much within the business-focused part of Microsoft and includes some tools and functions that Microsoft either hasn't developed on its own or hasn't been able to grow successfully. Some of the functions are partially there in SharePoint already, but Yammer brings some collaboration tools and some new features and functions that Microsoft enterprise customers will probably find very attractive."

If Microsoft does buy Yammer, it would be going head to head with the likes of Oracle and Oracle recently acquired Virtue and Collective Intellect, both of which analyze social media site data. And made big headlines recently when it acquired Buddy Media for $745 million.

From the standpoint of issues around IP infringement alone, King said, $1.2 billion for a company as cash-rich as Microsoft probably doesn't seem like a big deal.

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