Microsoft is reportedly negotiating to buy Yammer, the operator of social media networks for businesses, for more than $1 billion.
Citing two people "familiar with the matter," Bloomberg reported a deal could be concluded as early as this week.
Yammer was founded in 2008 and has more than 200,000 companies as customers, including Ford, Nationwide and 7-Eleven, with more than 4 million users.. The privately held company has raised $US142 million in venture capital.
Spokespersons at Microsoft and Yammer did not immediately return requests for comment. Some of Microsoft's biggest competitors, chiefly Oracle and Salesforce.com, have been aggressively moving into social networking for businesses.
Those services bring to employees the same kind of collaboration capabilities Facebook and Twitter provide for consumers.
Oracle unveiled its Oracle Social Network application at Oracle OpenWorld in October and will expand its social networking offerings through its pending acquisitions of Vitrue, a developer of social marketing applications, and Collective Intellect, which sells "social intelligence" software that businesses use to monitor postings on social media networks.
Last week Salesforce.com said it would acquire Buddy Media, a developer of social media marketing software, for $US689 million.
While Salesforce is best known for its cloud CRM applications, the company has been trumpeting its social enterprise applications for performance management, marketing and sales programs, including its Chatter service that competes with Yammer.