Microsoft reportedly looking to acquire Yammer for $1.2bn

Software giant may be after the biggest enterprise social network of them all

Microsoft is in talks to acquire Yammer for $1.2bn (£0.77bn), a "person familiar with the matter" has told The Wall Street Journal.

It is currently unclear when the deal will be announced or completed.

Commenting on the potential of the deal, and Microsoft's particular interests in it, principal analyst at Ovum, Richard Edwards, said:

"Launched in 2008, Yammer is a new breed of enterprise collaboration solution, designed from the ground up to exploit social, mobile, and cloud technologies, and would sit neatly alongside Skype, the communication product that Microsoft acquired this time last year for $8.5bn [£5.5bn]."

While Microsoft already has SharePoint Server to fill the social networking gap to an extent, its origin in the "pre-Facebook, pre-cloud era", said Edwards, means it makes sense for Microsoft to be chasing a new solution as enterprise social network (ESN) technology becomes more sought-after by businesses looking to license software solutions.

IBM, Oracle and Salesforce.com are all busy adding their own social capabilities to their software, according to Edwards.

Yammer says it already counts over 80 per cent of Fortune 500 companies among its client base, and is backed by PayPal co-founder and Facebook investor Peter Thiel.

"Organisations investing strategically in ESN software are likely to have products from Jive Software and Telligent on their shortlists, but Microsoft's acquisition of Yammer will undoubtedly mean that this offering gets added to that list too," said Edwards.

When contacted by Computing, both Microsoft and Yammer refused to comment on the potential deal.