Microsoft has announced plans to acquire enterprise social networking firm Yammer for $1.2bn in cash.
Yammer will join the Microsoft Office division, led by division president Kurt DelBene, and the team will continue to report to current chief executive David Sacks.
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“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Microsoft CEO Steve Ballmer.
“Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services,” he said.
Launched in 2008, Yammer now has more than five million corporate users, including employees at 85% of Fortune magazine's annual list of the top 500 US companies.
The basic version of Yammer is free, and customers can pay to upgrade their network to receive advanced administrative and security controls, integrations with enterprise applications, priority customer service and a designated customer success manager.
Microsoft said in a statement that Yammer "allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative."
Yammer will continue to develop its standalone service, but Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype, the software company said.
“When we started Yammer four years ago, we set out to do something big,” said CEO David Sacks. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”
The acquisition, widely seen as Microsoft's latest move in its battle with Google for the future of technology in the workplace, is subject to customary closing conditions, including regulatory approval.
The move comes just over a year since Microsoft paid $8.5bn for the internet telephony firm Skype, which it is integrating into products as part of efforts to adapt its software to enable people to work, share and communicate online.
Last year, Microsoft launched Office 365, the first big shift of its productivity products into the cloud to square up against the rival Google Apps suite.