Update: Microsoft has announced that it has signed a definitive agreement to acquire Yammer for $1.2 billion in cash. With this acquisition, Yammer team will join the Microsoft Office Division, currently headed by division President Kurt DelBene, while the team will continue to report to current Yammer CEO, David Sacks.
The company also stated that Yammer now has 5 million corporate users adding 250,000 users every month, which includes employees from 85% of the Fortune 500 companies. Yammer CEO stated that Microsoft will continue to invest in developing Yammer’s standalone product and over time, users can expect integrations to Microsoft SharePoint, Office 365, Dynamics and Skype. He also added that Yammer’s expertise will “help shape the communication and collaboration experiences in Office 365″.
Earlier (June 15): Microsoft is all set to buy the enterprise social networking service Yammer for about $1.2 billion, reports The Wall Street Journal citing sources familiar with the development. This follows similar reports from Bloomberg and BusinessInsider which had previously reported similar developments citing its own independent sources.
The details of the acquisition are still very sketchy yet. While WSJ stated it is not clear as to when the deal will be officially announced, Bloomberg states that the deal may happen as soon as today (June 15) following an extensive negotiation period while other media reports suggests that the deal could be announced in the upcoming Microsoft press conference, scheduled to happen on the coming Monday (June 18).
Further, there is also a lot of confusion on the rumored acquisition price of Yammer at present. While WSJ pegs it at $1.2 billion, Bloomberg pegs it at more than $1 billion and TechCrunch suggests a price tag of $1.4 million. Expectedly though, Microsoft and Yammer representatives have declined to comment on these developments.
Launched in 2008, Yammer is a San Francisco based company started by Paypal Ex-COO David Sacks. The company has raised around $142 million in funding from a range of investors including DFJ Growth, Charles River Ventures Inc. Emergence Capital Partners, Meritech Capital Partners, Capricorn Investment Group LLC, Khosla Ventures and Crunchfund, Social+Capital Partnership, Founders Fund and U.S. Venture Partners. The company claims to have over 200,000 customers across the world, including Shell, DHL, Supervalu and Razorfish.
The company currently offers a Facebook-like private social networking platform within enterprises, allowing employees to It currently works on a freemium model, offering a basic free plans and paid plans starting at $79 per group per month going up to $15 per user per month. The company had claimed to have conversion rate of around 20% conversion rate of free to paid accounts in a recent Forbes report. The report had also stated that Yammer has about 4 million users, of which 800,000 were paid customers.
In April 2012, Yammer had acquired OneDrum, a Scotland-based startup that offers file sharing and collaboration solutions for businesses, to bring desktop sync and real time collaboration for Microsoft office suite to its platform. The company had also recently launched universal search, premium groups, a new Office 365 integration, updated mobile apps and Yammer Embed for enterprises.
Yammer currently competes with Jive, Salesforce.com’s Chatter, Convo (previously known as Convofy), Asana Inc, VMware’s Socialcast, Moxie Software and Atlassian’s HipChat and is available in 150 countries in 23 different languages.
What Next? If this acquisition goes through, Microsoft may integrate Yammer’s platform into enterprise products like SharePoint and offer a private social networking platform for enterprises with integration to its other products like Lync, Office, and Skype. Interestingly, Yammer already provides Sharepoint integration and had recently announced its integration to Microsoft Dynamics, featuring updates from the CRM solution to appear as activity stories in the Yammer Ticker.
With Inputs from Aman Rai