Microsoft to Buy Yammer for $1.2 Billion

Microsoft will buy Yammer, a social network service for businesses, for $1.2 billion in cash, as it seeks to strengthen its enterprise software business and compete more directly with Salesforce.

Under the terms of the deal, Yammer will be added to Microsoft’s office division and will continue to be led by David Sacks, its chief executive. Yammer, which calls itself “the enterprise social network,” is a sort of Facebook for business. Its Web-based service allows companies to create private social networks, where employees can privately chat, shares files and collaborate on projects. Though Microsoft’s suite of software has become ubiquitous in homes and offices, the company has fallen behind on social networking applications for businesses. The company offers SharePoint, a collaboration platform, but the service is primarily used to share and manage documents. With Yammer, Microsoft will be able to pin its applications to a social graph flush with communication tools.