Microsoft is to buy Yammer for $1.2b to up its capabilities in the social media in the enterprise. Yammer will be integrated with Office and Sharepoint. To me, the move is similar to/a reaction to the widespread use of Chatter amongst Salesforce.com enterprise users.
Yammer has some 5m users. It adopts a marketing technique similar to TechMarketView in that it encourages users in corporates to use the Twitter-like service free of charge. Once these gain real traction in the organisation, Yammer comes in selling a licence to run the software to manage the service. About 1m of the 5m users are covered by paid-for licences.
Overall this looks a sensible move. I’ve always been supportive of companies doing a series of M&A deals to fill strategic technical or geographic needs. The only ‘eyebrow raising’ bit of the deal is the price -$1.2b for a 4 year old company with very little revenue. But its mere small change compares to Microsoft’s bank balances.
Last night I was at a Prince’s Trust reception with a very happy Jean Tardy-Joubett of Qatalyst which represented Yammer in this deal. Qatalyst has a very strong record of being involved in the larger deals in the sector – like Autonomy & HP last year as you can read in my Lunch with Frank Quattrone of Qatalyst post in March 12