Microsoft Goes Social with Newest Purchase

With Yammer, businesses can create a private network for their employees.And, like Facebook, each employee can share files, post announcements, create events and message each other.The site allows companies to communicate with its customers and its vendors, too, through a content manager system.Created in 2008, Yammer has generated $142 million in venture funding.Its funding was originally raised by Peter Thiel, who was also the first major investor for Facebook.Even though its purchase of Yammer underscores (Microsofts) commitment to deliver technology that businesses need and people love, according to Microsoft CEO Steve Ballmer, the company was eager to acquire the network, which by the way, claims to have more than five million corporate users and eighty percent of the Fortune 500 list.In a joint statement, the companies informed their users that Yammer, Will continue to develop its standalone service, and will now provide its clients with complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics and Skype.Yammer is to become a part of Microsofts Office division.Though executives of the company evaded answering questions asked by journalists after the initial press release, Microsoft did state that Yammer and its staff will remain in its original location of San Francisco, instead of being required to relocate to Microsoft headquarters in Redmond, Washington.Microsoft also released its new tablet last week, Surface.The computer is designed to run on the companys newest operating system, the highly anticipated Windows 8, and will compete with Apples iPad.Microsoft is also facing threats from Google, who has created an assortment of toolbox programs similar to Microsofts but instead of being located on a single computer, will be accessible via the Internet.Its many fervent attempts to keep up with the fast paced and viciously competitive technological environment has not seemed to entice many investors.Microsoft stock fell by almost three percent, dropping eighty-two cents to $29.88.Microsofts newest acquisition has not yet released its revenue.Rick Sherlund, an analyst for Nomura Securities, has estimated that Yammers revenue was anywhere between fifteen million and twenty million last year.With Facebooks massive screw up on the IPO market in May, it isnt likely that Microsofts stock will see great improvement any time soon, either.Yammers CEO and co-founder, David Sacks, insists that negotiations between the two companies were in the works before Facebooks unfortunate start.Sacks also claims that the decision was not a result of shaky market conditions.Our thinking was based on the fit with Microsoft and the fact that we think Microsoft is a great partner for us in expanding the service and taking it to the next levelBusiness Management Articles, said Sacks.