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Report: Microsoft to Acquire Yammer for $1B

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Posted June 15, 2012 By Pedro Hernandez     Feedback

Microsoft prepares to spend big for a grab at the social enterprise market.

News that Microsoft is in advanced talks to acquire San Francisco-based Yammer for approximately $1 billion lit up the Twittersphere on Thursday, appropriately enough.

According to a Bloomberg report, the companies are close to striking a deal. The Wall Street Journal reports today that Yammer has accepted Microsoft's offer of $1.2 billion, and the companies are preparing to make the announcement official.

Yammer's technology creates private social networks for organizations. Essentially, it brings popular social media aspects of Facebook and Twitter, like real-time activity streams and sharing, into private, business-oriented networks to help workforces connect and collaborate.

The startup claims to have 85 percent of the Fortune 500 as customers and an estimated 5 million users. Customers include eBay, Ford and Shell. Since its founding in 2008 by , former PayPal COO David Sacks, Yammer has attracted over $140 million in venture capital funding.

Microsoft, while a leader in business software, has yet to establish itself as a major force in the booming social enterprise market. Acquiring Yammer could change that.

Big Spending on Social Enterprise

In the race for the social-enabled workplace, technology companies are spending big.

In May, Oracle reportedly spent $300 million for Vitrue, a provider of cloud-based social marketing services. In June, it snapped up Collective Intellect, a social intelligence specialist that employs two of today’s hottest technologies: the cloud and Big Data analytics.

This month, Salesforce announced it was acquiring Buddy Media, a social media marketing firm, for $689 million. Last year  Salesforce spent $326 million for social CRM firm Radian6.

When they're not writing big checks, companies are forging alliances and launching new products. In the past few months, companies like social intranet pioneer Jive and CRM provider Zoho have been busy expanding their social enterprise offerings.

Are Microsoft Office, SharePoint and Dynamics – the latter of which already integrates with Yammer -- about to get native Facebook-like features? The next few days could tell.

Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

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