Another Big Player In Social Networking : Microsoft

It turns out the rumours last week were true. Microsoft has announced that it will officially acquire the social networking site Yammer for Rs 72 billion($1.2 Billion) in cash. As part of the acquisition, Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and his team will continue to report to the current CEO David Sacks.

While the main site will remain unchanged, Yammer will be integrating Microsoft’s products into their service such as SharePoint, Office365, Dynamics and Skype. While adding in Microsoft office features is par for the course -its file-sharing tools among other things would be of massive appeal to Microsoft – the Skype integration will be interesting as you could see Microsoft trying to do what LinkedIn did last week by integrating live text and video chat into the service for group meetings and one-on-one chats.

In a blog post, Yammer’s CEO David Sacks said: “When Adam Pisoni and I started Yammer, we set out to do something big.  When most people thought social networking was for kids, we had a vision for how it could change the way we work.  Four years ago, we started paddling out to catch the wave that we’re riding today. With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done with software that is built for the enterprise and loved by users.”

Since it was founded four years ago,  Yammer has quietly gone about its business, but now has more than 5 million corporate users, including employees at 85% of the Fortune 500. The site announced at the beginning of the year that the number of corporate users increased from 1.6 million to 4 million, the number of paid sales grew from 300,000 to 800,000 and the average deal size increase by 21% overall