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Microsoft Buys Business-Focussed Social Networking Site Yammer For $1.2 Billion

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Microsoft confirmed today that it has purchased business-focussed social networking site Yammer for a cool $1.2 billion.

Yammer is four years old and currently has 5 million active users – the site operates a Facebook-style business-to-business social network. Unlike Twitter, which is used for broadcasting messages to the public, Yammer is used for private communication within organisations and pre-designated groups.

Yammer originally launched as an enterprise microblogging service, but has since evolved to become a fully fledged enterprise social network.

There had been reports that Microsoft was interested in purchasing the fledgling social network with a deal finally being made public this evening by Microsoft CEO Steve Ballmer.

Yammer has some heavyweight users including motoring giant Ford and the business services firm Deloitte. Microsoft hasn’t revealed what it plans to do with Yammer, if anything, but it’s thought the acquisition will make its range of software products more appealing with Microsoft’s continued push towards the cloud.

Last year Microsoft took the tech-world by surprise after it bought the communications business Skype and is now well on the way to integrating the service into its current portfolio software.

Yammer’s chief executive David Sacks said: “When we started Yammer four years ago, we set out to do something big.

“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.”

Started in 2008 by PayPal founder David Sacks, the San Francisco-based Yammer has raised about $142m in funding since its inception. It is backed by PayPal co-founder Peter Thiel, who also invested in Facebook.

Microsoft has increasingly moved its Office products – including Microsoft Word, Excel and Powerpoint, which generate about 50% of its profits – towards a more collaborative cloud-based system and this acquisition should aid that shift.

Last year the software firm released Office 365, the first big shift of its word processing products into the cloud. Documents are available over the internet and on a number of devices for users to share and collaborate with.

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