UPDATED 6/15, 10:15 AM A couple of years back, someone on staff here suggested we move to communicating as a group on Yammer, a site that supports the creation of private social networks for business. I found it easier to use our own internal messaging platforms and quickly abandoned the effort, as did my colleagues. But apparently, lots of other companies found Yammer not just useful but essential to their own enterprise social networking. Yammer claims more than 5 million corporate users from companies like Deloitte, Ford, Nationwide, 7-Eleven, Orbitz Worldwide, Rakuten, and Telefonica O2.
Now, in a move that could affect enterprise apps everywhere, Microsoft is reportedly in talks to buy Yammer less than four years after its founding in 2008.
Redmond has agreed to pay $1.2 billion for Yammer, according to The Wall Street Journal. Neither company had made any official statement about the matter at press time.
By any measure, Yammer's done well. Its first investor, Peter Thiel of Social+Capital Partnership, was also the first investor in Facebook. Yammer has garnered $142 million in venture funding. More than 300 employees work for Yammer. The company's CEO, David Sacks, recognizes the value of social media as theater.
Indeed, the use of social networks for business has fostered a seemingly endless series of comparisons between Yammer and LinkedIn, which claims over 100 million users.
Yammer, of course, is focused on microblogging for multiple users, something that's not featured on LinkedIn. At one time, though, Yammer couldn't provide the search functions LinkedIn had. But Yammer released enterprise search capabilities in April.
Yammer offers a microblogging platform for enterprises. Source: Yammer.
The integration of social networking capabilities with CRM platforms and other business applications is a vital aspect of this potential deal. (LinkedIn also is integrated with leading CRM platforms and with Microsoft's Dynamics.) This integration is the reason that Salesforce.com and Oracle have made acquisitions of their own in this area recently. And it's the reason that IT professionals will be watching the outcome of this possible acquisition.
So why has Microsoft chosen Yammer? The answer isn't clear. Yammer is private, unlike LinkedIn. And if any firm can offer LinkedIn competition in the area of enterprise social media, it's Yammer.
magneticnorth, I would agree with you to a certain extent. If LinkedIn wants to position itself that way it should provide social networking within its platform. But then would it be any different than the apps on FB that connect you to professionals and/or headhunters?
Over the years, LinkedIn has positioned itself to be a platform for professionals. I think if it would introduce a social network element within the current platform it might lose its standing.
You point out some great areas where LinkedIn needs features -- and your point that they could win big if they develop these soon is well taken. We'll see. If LinkedIn doesn't take this chance, someone else will.
I really hope they pursue it. Last time I checked, LinkedIn had a partnership with Manymoon, which would have been its PM app. But Salesforce has turned Manymoon into Do, and any enterprise IT manager could tell that this stripped-down app isn't going to be enough for an organization. We need pages, extensive moderation features, customization options, sub-groups, etc. Give LinkedIn groups those needed features and LinkedIn will indeed become the social network for work.
Good idea, Magneticnorth. Perhaps LinkedIn could build on its Groups with additional social networking features. The Groups seem popular. There's low-hanging fruit here.
The acquisition makes sense because, as much as I'd want to deny it, Microsoft has a solid grip of the enterprise. Yammer couldn't have gotten a better buyer.
Last year, I commented on another site that if LinkedIn really wants to position itself as the "professional social network," it should provide companies with private social networks within LinkedIn. It won't be the social network for your profession if its main participation is to display your CV to headhunters. How about actually being part of work, i.e. that thing we do everyday? How hard would it be for LinkedIn to add that feature, anyway? I'd think the product development investment would pay off, since this is functionality that companies would pay for, as evidenced by Yammer. I think LinkedIn should look beyond recruitment and advertising as its income sources.
Yes, this is great news for Yammer's founders who will get a well-deserved big payday, but I hope Microsoft doesn't screw this up. There are very few enterprise tools out there that people actually like and find useful. Would hate to see this one disappear.
Let's hope that Microsoft can make the most of this purchase. I always worry when big companies make "perfect" buys like this one because all too often they don't produce the hoped-for results.
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