June 27, 2012

Microsoft buys internet startup Yammer for $1.2 bn

 Software giant Microsoft is buying Internet start-up Yammer for $1.2 billion so as to bring Facebook-like sharing features to its software applications.

The deal was announced on Monday. Two weeks before, we had media reports regarding opening of negotiation by Microsoft to snap-up ‘Yammer’.

As per Microsoft, Yammer has more than 5m corporate users at 85pc of the Fortune 500 companies. The company that started in 2008 as a messaging tool for companies developed into a wider social network in a small span of time of 4 years.

Like Facebook, Yammer specializes in creating private social networks where employees of the same company can be updated on what their colleagues are doing.

However, Yammer will continue to be run from its San Francisco headquarters by its co-founder and CEO, David Sacks. It will also continue to provide its services separately from Microsoft’s offerings.

Facebook’s first major investor Peter Thiel had risen Yammer’s initial funding at the beginning who formerly worked with Mr. Sacks while they were both executives at PayPal.

World’s largest software maker Microsoft took a right step forward which can be seen as a major shift in the technology industry by owning Yammer.

Last year Microsoft had acquired Internet video chat service Skype with $8.5 billion as a major step to remain relevant which was also the largest acquisition in the company’s history.

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