Microsoft to buy social network business software company Yammer for $1.2 bn

Microsoft Corp yesterday said that it will acquire four-year old startup social network business software company Yammer Inc for more than $1 billion, as the computer technology giant plans to merge Yammer's sharing features that are similar to Facebook to its suite of business software applications.

Announcing the deal, Microsoft CEO Steve Ballmer said, "The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love…… Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."

San Francisco-based Yammer was founded in 2008 by David Sacks, the former COO at PayPal Inc, who originally launched it as an enterprise microblogging service, which has now evolved as a full-fledged enterprise social network.

Yammer builds internal social networks for businesses that allow employees to put up profiles and microblogs, participate in discussion forums and receive activity stream notifications about colleagues

Yammer and Facebook share the same first investor, Peter Thiel, co-founder of PayPal, and backed by Social+Capital Partnership – a fund established by former Facebook vice president, Chamath Palihapitiya.

Yammer has raised more than $140 million in funding from venture firms, including Charles River Ventures and Emergence Capital Partners.