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Microsoft Said to Agree to Buy Yammer for $1.2 Billion

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., the world’s largest software maker, has agreed to purchase Yammer Inc., operator of a social network for businesses, for $1.2 billion, said a person familiar with the matter.

The deal is expected to be announced by the end of June, said the person, who asked not to be identified because the negotiations are private. Dee Anna McPherson, a spokeswoman for Yammer, declined to comment on a potential acquisition, as did Frank Shaw, a spokesman for Microsoft.

Microsoft could add Yammer’s corporate social networking tools to its Office and SharePoint software products for businesses. 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.

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.

Microsoft shares rose 2.3 percent to $30.02 at yesterday’s close in New York. The stock has increased 16 percent this year.

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