Microsoft Said to Be ‘In Talks to Buy Social Network Yammer For $1Bn’

Microsoft Corp. is reportedly in discussions to acquire Yammer Inc., operator of a social network for businesses.

Microsoft is in talks to buy Yammer, a leading social network for companies, for more than $1 Billion, according to the reports. Photo: Yammer Team/Flickr

First Business Insider reported that Microsoft was deep into the process of buying business social network provider Yammer, then the rumour was confirmed by Bloomberg.

Several people were overheard yammering today that Microsoft is supposedly acquiring the business social network Yammer, writes CNet’s Dara Kerr.

People were reportedly heard talking about the possible buyout not far from Yammer’s office, at the Caltrain station in San Francisco.

Later, a woman named Sarah Taylor tweeted that she also eavesdropped on people talking about it at The Creamery, a coffee shop near Yammer’s office.

Bloomberg writes, citing an anonimous person, that Microsoft may pay more than $1 billion, and a deal may be reached as soon as tomorrow.

San Francisco-based social network Yammer is sort of like Facebook for companies: employees can post, share, and discuss items there.

The social network was founded by David Sacks, the former chief operating officer at PayPal, in 2008, and is currently used by more than 200,000 companies, including Ford and eBay, according to The Telegraph.

As opposed to Twitter, which is used for broadcasting messages to the public, Yammer is used only for private communication within companies.

Yammer has raised more than $140 million in funding from venture firms, including Charles River Ventures Inc. and Emergence Capital Partners.

The social network operates as a freemium service and offers a basic free service, as well as a premium version of the service for $5 per user per month.

Frank Shaw, a spokesman for Microsoft, declined to comment on a potential deal.

Deanna McPherson, a spokeswoman for Yammer, also declined to comment.

Microsoft already owns a range of business products, adding Yammer would help the company, which is the world’s largest software maker, add social-networking tools to the suite of products it offers corporate customers.

A deal with Yammer also would step up Microsoft’s competition with Inc., which gained social-marketing tools through its $745 million purchase of Buddy Media Inc. earlier this month, and Oracle Corp., which recently bought two companies that analyze data on social-media sites — Vitrue Inc. and Collective Intellect Inc.

According to reports, Yammer raised $85 million in February at a reported valuation of $500 million.

An acquisition by Microsoft would have to be well north of that—maybe even double.

Though the acquisition seems to fit for Microsoft, Ventire Beat asks a question – what Microsoft would do with the new company and technology.

If, like Skype for example, the relationship is arms-length, and Yammer continues to grow, the deal could turn out to be a positive for both companies.

On the other hand, if Microsoft attempts some massive integration with SharePoint, look out.

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