Microsoft to Spend $1.2 Billion on Yammer, a Social Network for Enterprise

It's said that a fool and his money are soon parted (just ask Nokia), but is Microsoft being foolish spending over a billion dollars to acquire Yammer, essentially a private social network for the enterprise? Time will tell, and while nothing has been officially announced yet by either Microsoft or Yammer, The Wall Street Journal heard from "a person familiar with the matter" that it's a done deal.

Assuming this goes through, one can only wonder what Microsoft is thinking. One scenario WSJ thought of is adding more social features to Microsoft Office, even though SharePoint provides some of the same features as Yammer would.

"Yammer is a secure, private social network for your company," Yammer explains on its 'Who We Are' page. "Yammer empowers employees to be more productive and successful by enabling them to collaborate easily, make smarter decisions faster, and self-organize into teams to take on any business challenge. It is a new way of working that naturally drives business alignment and agility, reduces cycle times, engages employees and improves relationships with customers and partners.

Yammer has raised $142 million in venture funding from top tier firms to date and is used by more than 200,000 companies around the world. Its founding president is Sean Parker, the same one who co-founded Napster and the first president of Facebook. According to Yammer, more than 80 percent of Fortune 500 companies use its service.