Microsoft Corp. and Yammer Inc. announced yesterday that they have entered into a definitive agreement under which Microsoft will acquire Yammer, a leading provider of enterprise social networks, for $1.2 billion in cash. Yammer will join the Microsoft Office Division, led by division President Kurt DelBene, and the team will continue to report to current CEO David Sacks. The acquisition is subject to customary closing conditions, including regulatory approval. 

Launched in 2008, Yammer now has more than 5 million corporate users, including employees at 85 percent of the Fortune 500. The service allows employees to join a secure, private social network for free and then makes it easy for companies to convert a grassroots movement into companywide strategic initiative. 

Yammer maintains that it will continue to develop its standalone service and maintain its commitment to simplicity, innovation, and cross-platform experiences. Moving forward, Microsoft plans to accelerate Yammer’s adoption alongside complementary offerings from Microsoft SharePoint, Office 365, Microsoft Dynamics, and Skype. 

According to Yammer CEO Sacks, “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”  

According to the press release: “The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” said Steve Ballmer, CEO, Microsoft. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.” 

In a TechWorld article, R. "Ray" Wang, an analyst at Constellation Research, contends that “there's a war to get to the employees." For example, in the past year SAP, Oracle, and Salesforce.com have each purchased cloud-based human resource applications in the form of SuccessFactors, Taleo and Rypple. Social collaboration tools are used by a wide audience, spreading a company's influence to a wider user group within the enterprise. 

But what does the acquisition mean for users? 

The challenge going forward is how Microsoft will integrate Yammer into its Office offerings, in particular, SharePoint without losing what makes Yammer a unique and popular social network tool. Social media expert and Groundswell author Charlene Li puts it succinctly when she writes, “The fact is that Yammer and its competitors are creating new way for work to get done, that is not only effective but also—dare we say it—makes work fun.”  

One thing is certain, "the exposure of the Yammer ESN \[enterprise social network\] to the Microsoft distribution engine should be interesting to watch," writes Martin Fauscette, who tracks enterprise software for IDC, who expects Microsoft to aggressively integrate Yammer into its Office, SharePoint, and Exchange products.