Ben Woodhead Deputy editor - digital

Ben Woodhead is deputy editor - digital at the Financial Review Group. He writes on business, technology, politics and the economy and can be found on BRW, The Australian Financial Review and Smart Investor.

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Microsoft buys Yammer for $1.2bn

Published 26 June 2012 05:46, Updated 27 June 2012 04:23

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Microsoft buys Yammer for $1.2bn

Microsoft chief Steve Ballmer says Yammer, which bills itself as a ‘private social network for your company’, will continue to operate as a standalone service. Photo: AFP

Software behemoth Microsoft has made a hotly anticipated play in the social media sector, snapping up start-up Yammer for $US1.2 billion in cash.

Microsoft confirmed the deal on Monday, saying it would allow the corporate social network to continue to operate as a standalone service continue while also working to encourage its adoption alongside products such as Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

“The acquisition of Yammer underscores our commitment to deliver technology that business people need and love,” Microsoft chief Steve Ballmer said in a statement. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complimentary cloud services.”

Microsoft’s cash deal to buy out Yammer, which has around 5 million corporate users including employees at 85 per cent of Fortune 500 companies, continues a wave of consolidation in the crowded social media sector.

Other recent deals include Google’s acquisition of social advertising start-up Meebo for an estimated $US100 million and’s purchase of Buddy Media for $US745 million this month.

Yammer chief executive David Sacks, who will report to Microsoft Office Division president Kurt DelBene said the deal would allow the corporate social network to expand to scale up.

“When we started Yammer four years ago, we set out to do something big,” Sacks said in the Microsoft statement.

“We had a vision for how social network could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

Since its launch in 2008, Yammer – which describes itself as a “private social network for your company” – has raised around $US142 million.