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Yammer buyout could fit with many Microsoft businesses

Microsoft is reportedly in talks to buy enterprise social network company Yammer for $1 billion-plus, a move that could bolster everything from Microsoft's unified communications to CRM businesses.

Early reports from Bloomberg and BusinessInsider say a deal could happen as soon as Friday, though neither company is confirming anything yet.

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Yammer, which launched in 2008, is one of a slew of vendors whose software and services are designed to help companies build private social networks that provide the sort of privacy and security safeguards you don't get with Facebook. Other offerings come from Jive, Huddle and Salesforce.com (Chatter), a Microsoft competitor. Yammer claims 85% of the Fortune 500 companies are using its software-as-a-service offering.

A potential Yammer buyout could fit in with any number of Microsoft businesses. Microsoft has naturally been seeking ways to make a bigger play in social networking, most recently announcing So.cl in May - an introduction that has received relatively little play. 

But Yammer is focused on enterprise social networking. It has worked with Microsoft's SharePoint tools for the past couple of years and could sync up well with Microsoft's Lync unified communications products and Skype VoIP business as well. A buyout of Yammer would be Microsoft's biggest since last May, when it announced plans to buy Skype for $8.5 billion. 

Yammer itself earlier this spring made an acquisition that relates to Microsoft. Yammer bought OneDrum, a maker of software that allows users to work on Microsoft Office documents and other files collaboratively, according to IDG News Service. What's more, Yammer in April announced integration of its service with Microsoft Dynamics, a CRM product.

Yammer wouldn't appear to be hurting for cash, having recently raised $85 million in a fifth round of funding led by DFJ Growth, bringing total funding to $142 million. But becoming part of Microsoft would certainly give the company more muscle with which to compete vs. bigger companies.

Reaction to the possible deal has been mixed in social network circles. "cwilmc" on Twitter wrote: "Would fit great with Sharepoint, price is very steep though.." Less enthusiastic was "sbberg1", who wrote: "Wait. Dude. Come on. I like these guys. Please someone else step up."

Bob Brown tracks network research in his Alpha Doggs blog and Facebook page, as well on Twitter and Google +. 

Read more about software in Network World's Software section.


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