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Microsoft Said to Hold Talks on Buying Yammer Social Site

Microsoft Said to Be in Talks to Buy Yammer’s Social Network
Yammer is a social network designed for business collaboration, for use on multiple platforms. Photographer: Gerard Til/Redux

Microsoft Corp. is in discussions to acquire Yammer Inc., operator of a social network for businesses, said two people familiar with the matter.

Microsoft may pay more than $1 billion, and a deal may be reached as soon as tomorrow, said one person, who declined to be identified because the negotiations are private.

Gaining closely-held Yammer would help Microsoft, the world’s largest software maker, add social-networking tools to the suite of products it offers corporate customers. Large information-technology companies are snapping up nimbler startups, sometimes before they reach an initial public offering, spending $17.4 billion on enterprise software acquisitions in 2011, compared with $715.5 million in 2009, data compiled by Bloomberg show.

A deal for Yammer would follow other recent enterprise software purchases centered around social media. Inc. gained social-marketing tools through its $745 million purchase of Buddy Media Inc. earlier this month, and Oracle Corp. recently bought two companies that analyze data on social-media sites -- Vitrue Inc. and Collective Intellect Inc.

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment on a potential deal. Dee Anna McPherson, a spokeswoman for closely held Yammer, also declined to comment.

Venture Funding

San Francisco-based Yammer was founded in 2008 by David Sacks, the former chief operating officer at PayPal Inc. It has raised more than $140 million in funding from venture firms, including Charles River Ventures Inc. and Emergence Capital Partners.

Yammer is used by more than 200,000 companies, including Ford Motor Co. and EBay Inc. It provides features for internal corporate use that are similar to those found on Facebook Inc.’s website. Yammer competes with Jive Software Inc., Chatter, run by, and Asana Inc., Facebook co-founder Dustin Moskovitz’s company.

Jive, which had its initial public offering in December, gained 12 percent to $18.67 at the close in New York. The stock has gained 17 percent this year.

Microsoft’s shares increased 0.7 percent to $29.34. The stock has climbed 13 percent this year.

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