Rumors are Microsoft is in talks to buy the social enterprise company Yammer, for a price of over $1 billion. Yammer isn’t your typical social networking company, rather than catering to a market for personal use, it caters to companies that use it as an internal collaboration tool. 200,000 companies, like Ford Motor Co, EBay Inc. and Disney use it to collaborate amongst employees.
It is no surprise that Microsoft has been left of the social networking world and is playing catch up. Maybe this acquisition will bolster its existing suite of business friendly tools (e.g., Microsoft Office, Sharepoint, Skype). Microsoft will undoubtedly enhance Yammer to be more stable and integrate it with other tools like Sharepoint or Skype. However, unlike the VoIP provider, Yammer appears that it probably will cease to be free to users.
It appears larger IT companies have been going on a bit of a spending spree by snatching up enterprise-specific start ups. In 2011 they spent $17.4 billion on enterprise software acquisitions, compared to just $715.5 million in 2009. On the heels of Facebook’s $1 billion acquisition of Instagram, are we on the cusp of even greater acquisitions in the future? Is it just sheer coincidence that $1 billion+ appears to be the going rate of start ups?