Microsoft (MSFT) Looks to Get More Social with Corporate America

June 14, 2012 7:48 AM EDT Send to a Friend
Is Microsoft (Nasdaq: MSFT) looking to build its own Facebook (Nasdaq: FB)? Or does it simply want to get a leg-up in the corporate social scene?

Fresh off announcing another big, beautiful quarterly dividend, Microsoft may have more news to hit the wires soon: the acquisition of a social networking platform.

According to reports out Thursday, the Redmond, WA-based software and (now) gaming giant may look to buyout Yammer, a company which runs a social network for businesses. Okay, so its no Facebook, but it is closer to LinkedIn (NYSE: LNKD), which is a site dedicated to connecting business professionals.

Yammer is said to be used by more than 200,000 companies, which range from Ford Motor (NYSE: F) to eBay (Nasdaq: EBAY). The entire deal was a start-up by former PayPal COO David Sacks, who raised more than $140 million from venture firms.

But, will the deal go through? Maybe, according to AllThingsD. One of their reporters coincidentally had a meeting scheduled with Yammer co-founder Adam Pisoni cancelled due to a "personal emergency."

The author also noted some of Yammer's historical stats, like having about 4 million corporate users, but a conversion rate of just 20 percent. Like most social sites, Yammer users sign up for free, but there may not be anything too sticky to keep them coming back for more. After all, why use eighteen different social sites when Twitter, Facebook, et al, have similar features with more users?

So, Microsoft might acquire the company for something around $800 million to $1 billion (its current valuation, probably based on something measured at Facebook). Worst case, Microsoft gets a buggy platform with at least 4 million corporate accounts. It might be able to enhance its Office suite with the system, or simply use the platform to launch its own, new social media platform.

Microsoft also better think fast. Salesforce.com plans to acquire Buddy Media in a $745 million deal while peer Oracle (Nasdaq: ORCL) recently snatched-up Collective Intellect and Vitrue, two companies dedicated to social media analysis.

Ahead of the bell Thursday, Microsoft shares are flat.


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