Rumor: Microsoft buying Yammer for $1 billion, deal could close today

yammer microsoft dealAccording to an overheard conversation at a coffee house near Yammer’s San Francisco office, the social enterprise application is being acquired by Microsoft. The story, mind you, gets its legs from this tweet. But it’s now being corroborated by Bloomberg, where it’s been reported that the deal may exceed more than $1 billion.  

yammer sale tweetThe social-for-corporate product market has been a busy one as of late. The purchase-happy Salesforce recently bought Buddy Media for a whopping $745 million, and Jive went public in IPO (and is now experiencing a little bump in Wall Street thanks to the Microsoft-Yammer acquisition rumors.

This means that Yammer has been in a pretty comfortable place. Salesforce is a more sophisticated, more expensive, CRM focused application, and Jive errs farther on the technical side. Yammer is easily the most well known, free, easy-to-install application that looks and acts like Facebook, only with a much more professional demeanor. It’s filled the space between no enterprise system to highly sophisticated ones (a la Salesforce and Jive) – it’s more organizational than business strategy, and that’s what managed to accrue Yammer four million users.

But the social scene being what it is, an exit makes sense. There’s this pressure to turn these products into millions before it’s “too late,” and whether anyone will admit it or not, the aftermath of the Facebook IPO and the exits or sales of big names in social like Yelp and Instagram in the last year has likely had some effect.

It’s possible that this deal would resemble the Instagram-Facebook relationship, and Yammer could continue to exist and grow semi-autonomously while also helping feed whatever social enterprise plans Microsoft has. But I wouldn’t be surprised if the Redmond giant has grander ideas about folding Yammer into its portfolio: the company desperately needs this type of product to help connecting and collaboration flow more smoothly across Microsoft applications. SharePoint was an attempt to do this, but it’s since become outdated and not a focus for Microsoft – and in the mean time, companies like Yammer wrote their names all over this space.

If Microsoft does bake Yammer deeply into its own services, there’s a possibility that we can kiss free use goodbye, or that it could fade into the background – as is always the concern with these types of acquisitions. Fingers crossed this isn’t the case – but if it is, get ready for those waiting in the wings, like Socialcast and HipChat, to swoop right in.