Microsoft just announced an agreement to buy Yammer, the business-oriented social network, for $1.2 billion in cash. The company will join the Microsoft Office Division.

The companies say in a news release, “Yammer will continue to develop its standalone service and maintain its commitment to simplicity, innovation and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.”

Yammer employees will report to current Yammer CEO David Sacks, under Microsoft Office Division president Kurt DelBene.

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” says Microsoft CEO Steve Ballmer in the news release. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

[Follow-up: Microsoft’s Ballmer: Yammer’s ‘viral adoption model’ is key to $1.2 billion deal]

The announcement confirms a deal first rumored two weeks ago, when Yammer employees were overheard discussing it at a coffee shop near their San Francisco headquarters.

Microsoft says in the news release that Yammer “now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500.”  Yammer offers a Facebook-style interface used for communication and collaboration inside companies. Its customers include Vodacom, Ford Motor Co., LG Electronics and many others.

Is Yammer really worth $1.2 billion? The companies released an infographic to make the case for the acquisition. Here it is, via Microsoft’s News Center.

Comments

  • http://frugalmechanic.com/ Eric Peters

    the URI says million but its BILLION! congrats guys

    • http://geekwire.com Todd Bishop

      That’s correct, it is billion. I fixed the url a few seconds after posting but it took a few minutes to resolve. Thanks.

  • Guest

    Congrats to Yammer on a successful exit! This is great news for the whole social intranet sector.

  • guest

    And another $1.3 billion duplicating existing efforts because the internal MS product team came up way short.

  • Peter H

    4 years to a $1 billion exit. Awesome result.

    Tots jels!

  • http://www.facebook.com/people/Donovan-Kliegg/100001187341261 Donovan Kliegg

    This is the best way I’ve seen so far to burn up your budget before the end of the fiscal year.

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