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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

June 25, 2012 at 11:07 AM

It’s official: Microsoft acquiring Yammer for $1.2 billion [Updated]

Microsoft and Yammer announced today what’s been rumored for a while now: That the software giant is acquiring the San Francisco-based enterprise social networking company.

Yammer will join the Microsoft Office division, under President Kurt DelBene, and the team will continue to report to current CEO David Sacks, according to the news release. [Updated 6/26: Sacks will hold the title of corporate vice president, according to Microsoft.]

The companies say that Yammer will continue to develop its standalone service while Microsoft will also sell Yammer’s services alongside complementary offerings from Microsoft such as SharePoint, Office 365, Microsoft Dynamics and Skype.

DelBene writes in a blog post about the acquisition:

Over time, I see opportunity for exciting new scenarios by adding Yammer’s stand-alone service alongside and integrated into our collaboration offerings with SharePoint, Office 365, Dynamics and Skype. I picture people being able to use Yammer to manage and expand their professional relationships, share and collaborate on Office documents, stay informed about content updates, and to seamlessly move from status updates and feeds into voice and video conversations.

Yammer, launched in 2008, now has more than 5 million corporate users, according to the news release.

The acquisition is pending regulatory approval.

[Updated 11:58 a.m.: In a conference call with reporters and analysts just now, Microsoft CEO Steve Ballmer emphasized how interested Microsoft was not just in Yammer’s social networking capabilities but its viral adoption model.

“Consumerization of IT is a trend which I think perhaps more than almost any other company out there, Yammer has gotten right with its viral adoption model,” Ballmer said. “Yammer now has a sales model that we like: viral adoption by the end user, the consumer inside some kind of professional organization, with the option for IT to buy enterprise-level capability and management. … That adoption model we’re excited about and we want to pour more content into it.”

Ballmer, DelBene and Sacks stressed that they like Yammer as a standalone service and are committed to continuing that.

But there are natural synergies as well with MIcrosoft products such as SharePoint that they will look into.

“Think of Yammer as a fundamental part of our Office family,” Ballmer said.

He said he envisioned that people who like using yammer will be able to go from Yammer to using other Microsoft services as well. “Or you can go other MIcrosoft services to Yammer,” he said.

DelBene said Yammer will be a division within the larger Office division and will continue to be based in the San Francisco area.]

Here’s a story we did earlier on what Microsoft could get from a Yammer acquisition.

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