Redmond, Washington — Following weeks of rumors and reports, as anticipated, software maker Microsoft on Monday officially announced that it had endorsed a deal to buy enterprise social networking outfit Yammer Inc. for $1.2 billion in cash, a transaction that highlights a new trend in business software and perceived shortcomings in Microsoft’s own products.
Microsoft has relentlessly been moving its products from desktops and in-house servers to cloud-based software. Lately, it has initiated to integrate them on the cloud for consumer and business markets, such as its voice and video over Internet service, Skype. With the Yammer deal, Microsoft ups the ante against its rivals.
Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and the team will continue to report to current Yammer CEO David Sacks, according to a Microsoft statement. However, the companies also said the the social networking service will remain as a standalone offering as well.
“The acquisition of Yammer emphasize our commitment to deliver technology that businesses need and people love,” said Steve Ballmer, CEO of Microsoft. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”
Yammer is often dubbed as Facebook for the workplace, offering companies a unique kind of social network that is designed to be more appealing to employees. Microsoft said Monday it will continue Yammer as a standalone service, and it is looking for ways to weave Yammer functions into its Microsoft Office suite of desktop applications.
Some other cloud-based services owned by the Redmond, Wash.-based technology giant includes SharePoint, Office 365, Microsoft Dynamics and Skype.
In a note on the Yammer website, the company said customers will “continue to enjoy a secure, private social network–delivered with the same emphasis on simplicity, innovation, and cross-platform experiences.”
“With Microsoft’s support, our aim is to substantially accelerate our vision to change the way work gets done through software that is built for the enterprise and loved by users,” Yammer said.
“When we started Yammer four years ago, we set out to do something big,” Sacks said. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we will need to scale and innovate.”
As a matter of fact, this acquisition had been rumored for weeks, including such leaked information as the final price tag. Besides, when Microsoft announced a major press event last week — at which its Surface tablet was unveiled — some observers at first expected it to be the announcement of the Yammer purchase.