Microsoft has announced it will acquire Yammer, the developer of cloud-based enterprise social networking services for businesses, for $US1.2 billion in cash.
The move confirms rumours that began circulating almost two weeks ago that Microsoft was negotiating to acquire Yammer for more than $US1 billion.
"The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love," said Microsoft CEO Steve Ballmer in a statement.
"Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."
Microsoft will continue to develop Yammer as a standalone service, the company said in a statement, and promised to maintain its "simplicity, innovation and cross-platform experiences."
But in a hint of its long-range plans for Yammer, Microsoft said it would "accelerate Yammer's adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype."
The synergistic opportunities would seem greatest to link Yammer with SharePoint, Microsoft's popular collaboration platform. Integrating Yammer with Office 365, Microsoft's cloud application suite, and the Dynamics ERP and CRM applications would boost the collaborative capabilities of those products.
Yammer's service lets a company's employees join a secure, private social network in much the same way consumers join Facebook.
Acquiring Yammer will help Microsoft catch up with competitors such as Salesforce.com and Oracle that have aggressively moved into social networking for businesses.
Yammer competes with Salesforce.com's Chatter social networking service and the Oracle Social Network application that the company unveiled at Oracle OpenWorld in October.
Launched in 2008, Yammer currently has 5 million corporate users.
The acquisition is Microsoft's largest since it spent $US8.5 billion to buy Skype Communications in May 2011. Microsoft said the acquisition is subject to regulatory approvals and other closing conditions -- the company did not say when it expects to close the deal.
Yammer will become part of the Microsoft Office Division that's overseen by division president Kurt DelBene, and Yammer employees will continue to report to Yammer CEO David Sacks.
Sacks said in a statement that being acquired by Microsoft would provide Yammer with access to "technologies, expertise and resources" the company needs "to scale and innovate."