Microsoft Is Buying Yammer, According To People At Yammer
UPDATE: Bloomberg is now reporting that Microsoft is in talks to buy Yammer for more than $1 billion, witha deal coming as soon as Friday. — EARLIER: We just heard from a source inside Yammer that the office has been abuzz since Monday …
Context & Ripple Effects
Microsoft's social-shopping spree has been an open question since this outlet argued back in May 2009 that Microsoft must buy Twitter — a deal that never happened. Three years on, it is closing on a different kind of social company: one built for the workplace rather than the public timeline.
The reporting moved fast today. Business Insider heard from a source inside Yammer that the office had been abuzz since Monday; Bloomberg then put the price above $1 billion with a deal possible as soon as Friday; and the Wall Street Journal reported the same day that Yammer has agreed to sell itself to Microsoft for $1.2 billion, a purchase that would bolt an enterprise social layer onto Office. The pickup list — Bloomberg, CNET, VentureBeat, GeekWire, PandoDaily — shows how quickly a leak became the week's defining enterprise-software story.
First-order effects
- Yammer's shareholders and employees get a nine-figure-plus exit barely four years after launch, while Microsoft gains a freemium enterprise social network it did not have to build in-house.
- Yammer's existing customers now face integration decisions: their collaboration vendor is about to sit inside the Office and SharePoint stack they may or may not already run.
Second-order effects
- Rivals selling enterprise social tools — Salesforce with Chatter, Jive, IBM — are forced to answer whether they sell, partner, or compete against an incumbent that just paid $1.2 billion for distribution into millions of Office seats.
- Google's own productivity suite loses none of its pressure either way: a Microsoft-Yammer pairing raises the stakes for whoever claims the 'social enterprise' label next.
Third-order effects
- If the pattern holds, bottom-up, freemium workplace tools end up consolidated into incumbent office-suite vendors rather than staying independent — the buyer of distribution wins over the builder of the product.
- It also signals that 'enterprise social' is being treated as a feature of the productivity suite, not a standalone market — a structural verdict on the standalone-social-for-work category.
The trend: Enterprise social networking is consolidating into the big office-suite vendors through acquisition, as incumbents buy the freemium tools that spread beneath them.