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Microsoft’s $1.2 billion Yammer purchase hints at acquisition strategy

Michelle Hammond /

US-based start-up Yammer will join the Microsoft Office Division after being acquired for $1.2 billion by the tech giant, highlighting Microsoft’s shift into the tech start-up space.

 

Yammer will join the Microsoft Office Division, led by division president Kurt DelBene, but the team will continue to report to Yammer co-founder and chief executive David Sacks.

 

Launched in 2008, Yammer has been described as “Facebook for businesses”. It uses a similar user interface to Facebook, but it is a private network confined to users within a company.

 

Sacks founded the company alongside Adam Pisoni, while Napster founder Sean Parker is on the board of advisors. Yammer now boasts more than five million corporate users.

 

Businesses can use the service as a kind of new-age intranet, posting problems, updates or questions for colleagues to respond to.

 

Earlier this year, it expanded to Australia after raising $US25 million in the United States.

 

Yammer’s Melbourne office is headed up by BlueFreeway co-founder Simon Spencer, who works alongside Ross Hill, founder of The Hive. Hill declined to comment on the acquisition.

 

But in a company blog, Sacks said Microsoft will continue to invest in Yammer’s standalone service, while the team will remain under his direction within the Microsoft Office Division.

 

“When Adam Pisoni and I started Yammer, we set out to do something big. When most people thought social networking was for kids, we had a vision for how it could change the way we work,” Sacks said.

 

“Four years ago, we started paddling out to catch the wave that we’re riding today.”

 

“With the backing of Microsoft, our aim is to massively accelerate our vision to change the way work gets done, with software that is built for the enterprise and loved by users.”

 

Sacks said Yammer customers will continue to receive the same service, “delivered with the same focus on simplicity, innovation, and cross-platform experiences”.

 

“Over time, you’ll see more and more connections to SharePoint, Office365, Dynamics and Skype,” he said.

 

Meanwhile, Microsoft chief executive Steve Ballmer said in a statement the acquisition “underscores our commitment to deliver technology that businesses need and love”.

 

“Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services,” Ballmer said.

 

David Obrand, Yammer vice president of global sales, told StartupSmart earlier this year the best way for a company to innovate is to “give all of your customers a voice and allow them to sing from the rooftops”.

 

Obrand said start-ups shouldn’t get caught up in customer acquisition, insisting it is just as important to retain existing customers, particularly when seeking funding.

 

“It doesn’t matter how fast you grow. If you can’t retain those customers, you’ll never be able to double or triple your figures,” he said.

 

“The biggest thing is to listen [to your customers]. One of the great things about Yammer is that it gives everyone… a voice, and a voice that is heard.”

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