San Francisco: Microsoft has announced a billion-dollar deal to buy startup Yammer which specialises in social networks for businesses.
Microsoft said on Monday that it will pay USD 1.2 billion in cash for Yammer, which will become part of the US technology titan's Office Division.
"The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love," said Microsoft chief executive Steve Ballmer.
"Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."
Yammer was launched in San Francisco in 2008 and enables companies to make private networks that let employees communicate Twitter-style while keeping exchanges away from public viewing.
Yammer has more than five million users, including workers at 85 percent of the Fortune 500 companies, according to Redmond, Washington-based Microsoft.
Microsoft said that it planned to promote adoption of Yammer's service tied to complementary offerings of software or services such as SharePoint, Skype, and Office 365.
"When we started Yammer four years ago, we set out to do something big," said Yammer chief executive David Sacks.    

"We had a vision for how social networking could change the way we work," he continued.
"Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we'll need to scale and innovate."
A key attraction of Yammer for Microsoft was that unlike rival services sold by business software firms such as Oracle or, Yammer spread virally by being free for people to use to collaborate with co-workers.
"We love the way Yammer built on a notion that things could grow virally," Ballmer said. "Consumerisation of IT (technology at work) is a trend that, more than any other company out there, Yammer has gotten right."
Yammer offers a free basic service and then gives companies the option of paying for premium versions offering administrative controls, security tools, analytics and other features.


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