Microsoft seals $1.2B Yammer deal

Microsoft Corp. has agreed to acquire enterprise social networking company Yammer Inc. for $1.2 billion in a deal that will expand the software giant's cloud services portfolio.

The companies said Yammer will continue to develop its stand-alone service and will join the Microsoft Office division.

The basic version of Yammer is free, but customers can pay to upgrade their network for more advanced administrative and security controls and integrations with enterprise applications. Yammer, which was launched in 2008, has more than five million corporate users.

AP

FILE- In this Monday, June 18, 2012, file photo, Microsoft CEO Steve Ballmer unveils its"Surface", a new tablet computer to compete with Apple's iPad at Hollywood's Milk Studios in Los Angeles. Microsoft announced Monday, June 25, 2012, that is paying $1.2 billion to buy Yammer, an Internet startup that has built a social network similar to Facebook for the business world. (AP Photo/Damian Dovarganes, File)

"Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services," said Microsoft CEO Steve Ballmer.

Microsoft plans to accelerate Yammer's adoption alongside offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.

Microsoft has said it has benefited from its strategy of promoting "hybrid" computing that blends in-house computing networks with cloud services.

Microsoft has been transitioning customers to cloud services and its forthcoming Windows 8 operating system, but still needs sales of its flagship products to remain robust.

In April, Microsoft reported its fiscal third-quarter profit slid 2.4 percent from a year-earlier period that included a tax benefit as seasonal weakness in entertainment demand offset growth in sales to businesses.