Microsoft agrees to $1.2bn purchase of Yammer

http://www.microsoft.com/en-us/news/Press/2012/Jun12/06-25MSYammerPR.aspx

by mehrshad • 14 years ago

146 89 14 years ago

mindcrime6• 14 years ago

This is going to be interesting; sleep with one eye open, Mr. Ballmer, sleep with one eye open...

Edit: for the downvoters who probably don't "get" the reference, out startup (Fogbeam Labs) are now competing with Microsoft since we're in this same "enterprise 2.0" space as Yammer.

Anyway, Mr. Ballmer... "never mind that noise you heard, it's just the beast under your bed." :-)

mindcrime6• 14 years ago

And this is why I love HN... Nothing like showing a little support for one of our own. :-)

It's not like we're the scrappy, underdog competitor, building Open Source products that will contribute to the world whether we ever make a dime or not, while Microsoft are the original Evil Empire of Software - monopolistic, profiteering gluttons who will do anything to make a buck.

le sigh it's all right, I still love you guys anyway. :-)

kprobst• 14 years ago

You seem to come across as petulant rather than someone who is challenging an entrenched competitor with innovation or whatever. Less talking, more doing. Just a thought.

davidcollantes• 14 years ago

Never heard of Yammer until now. The buying price is a lot; I remember the days when millions were only used (born in the sixties).

Anyway, yet another company swallowed by Microsoft. Whether it will "live" or "die", it is too early to tell.

bad_user5• 14 years ago

We've used Yammer inside our small company, but quickly gave up on it because we are few and I think Yammer is a lot more useful in big companies were you should keep up to date on what the other groups around you are doing.

The implementation is pretty solid though and I liked the features provided. It really is Twitter for the Enterprise, so this acquisition makes sense for Microsoft.

Some smart people like Coda Hale also work there. I wonder if they'll leave or not.

mindcrime6• 14 years ago

Just out of curiosity, are you willing to say how big (employee count, maybe) your company is?

mahyarm• 14 years ago

Yeah, something like yammer would probably be useful to companies that have crossed the two major office building barrier or similar.

daliusd• 14 years ago

I'm working in big company. Our company was experimenting with it as well but it was too much and later company dropped this experiment. Everyone was using it as corporate facebook and dropped back and forth various links about technology news and etc. Knowing that colleagues I barely know from foreign countries join yammer was not of much of value either (unless your are creepy type looking at nice girls/boys in your company). I have run from it as fast as I can. From other side I don't have Facebook account either so maybe that just not for me. I am glad that our company decided not to invest into Yammer (I think corporate accounts have free quota).

codahale• 14 years ago

    Some smart people like Coda Hale also work there.
    I wonder if they'll leave or not.

Oh heeeeell no.

dugmartin• 14 years ago

If you haven't already you might want to try out P2 from Automattic (http://p2theme.com/) - it is much lighter weight.

zainny2• 14 years ago

Tell me about it. All these valuations and buyouts starting with a $"B" make me a bit nervous (and truthfully, envious as well).

I don't understand how a market of rational actors can support these kind of numbers. There is just this complete disconnect in my mind with the value these companies provide (people, assets, IP, networking, users, etc.) and the sort of figures getting tossed around.

bad_user5• 14 years ago

The Yammer acquisition is consistent with one of Microsoft's core strengths (productivity and collaboration tools for the enterprise). Yammer is also a profitable business that's already really popular in Fortune 500 companies (by their own claims 85% of those companies, out of 200,000 total, which is pretty impressive).

mehrshad• 14 years ago

IMHO, MSFT's made somewhat strong progress on its integration of Skype (so far), promoting it as a strong value-add for the forthcoming XBox Live and WP8.

Yammer's a much-needed HR/quick collab tool for MSFT's appeal to CIOs, and I'm guessing it'll likely come to fruition as an integrated feature in Office 2018, and a beta feature in Office Live sooner than that. It's a good fit - much better than Salesforce buying them out to stifle MSFT/GOOG.

ckluis• 14 years ago

Can you say Facebook style communication > sharepoint?

Good purchase.

Chirag• 14 years ago

Now Microsoft seems to be finally getting wiser, Yammer is a good purchase for Microsoft. Specially if they can integrate it with Sharepoint and Office Suite. This can turn out very cool product from MS in long time, now I can only wish they down't screw up with a good product.

mindcrime6• 14 years ago

Don't worry, if they screw it up, there will be something better (and Open Source to boot) along to replace it. Give us time, give us time...

MartinCron2• 14 years ago

Specially if they can integrate it with Sharepoint and Office Suite

As a person who uses Yammer on purpose and Sharepoint only under duress, I would prefer to keep them distinct.

auxbuss• 14 years ago

They can. They (Yammer) bought One Drum (http://onedrum.com/) only a couple of months back.

(Checking my twitter feed, they arrived in SF from Stirling (Scotland) on 24 April.)

The guys are currently quite happy; tweeting: "Two startup exits in 12 weeks. I am Midas", "An analyst just asked Steve Ballmer if OneDrum played an important role in the acquisition".

reilly3000• 14 years ago

They need to have an answer to "The Social Enterprise" that SFDC is out marketing...

dm8• 14 years ago

"$1.2bn in cash"

Wow. Has there been any acquisitions north of $1bn with cash (and no equity) buyouts?

trapped123• 14 years ago

This is really a good buy for Microsoft. Yammer has the potential to eventually penetrate most of the medium to large enterprises. I have used it and it really is great tool for multi-location organizations.

cmwelsh• 14 years ago

How does this compare to Salesforce's Chatter? They seem to be the same thing, but I've heard Yammer is much better. I've only used Chatter.

MartinCron2• 14 years ago

I haven't used Chatter, but Yammer is extremely smooth and polished. I've been really impressed with it.

michaelbuckbee• 14 years ago

Chatter is more like a private enterprise version of Twitter (small messages, 'I'm working on X right now')

Yammer is more like a private enterprise version of Facebook, lots of groups and media postings and timeline/widgets commenting similar to Facebook.

rabble• 14 years ago

Ironically enough, yammer started out as a twitter clone for the enterprise, and evolved in to something more like a private facebook.

Mystitat• 14 years ago

I think Chatter is closer to your description of Yammer than Twitter. It really revolves around groups and updates on objects, and it has private messaging now.

spinchange• 14 years ago

Email isn't going anywhere (anytime soon), but I do think news-feed style posts with threaded comments for lots of group communication is far preferable to cc:->ALL. Smart buy for MSFT.

ams6110• 14 years ago

That's what Lotus Notes was, right (news-feed style posts with threaded comments). At least that how I saw it used, in the mid-late 1990s.

EGF• 14 years ago

Did anyone else try out and use Yammer for awhile and then ultimately switch away from it or off it it in favor of another tool or just back to email?

andrewpbrett• 14 years ago

We used it when I worked for TechCrunch (way back when). It's perfect for that setting: lots of writers, coordinating coverage, sharing interesting bits of information that you're not exactly sure who will find interesting. Etc.

It's not a good tool when it gets bastardized into a product management/planning/feature request tool. As a developer for them I was keenly aware of this flaw.

I've tried it in other contexts since leaving and it hasn't been a fit. Prefer HipChat/Trello.

wavephorm• 14 years ago

A company I used to work for used it. I found the client to be really horrendous. It was written in some sort of god-awful Adobe Air thing that used 100% CPU constantly while it ran. Just awful, I can't comprehend why anyone would use a terrible bloated architecture like Air to create what should be a simple lightweight chat system. And the chat program itself had no advantages over any other chat system.

Maybe I just didn't "get it".

rabidsnail• 14 years ago

I've never known anybody to use the native client. The web interface works well enough.

mnicole• 14 years ago

We've been using it at our company since sometime around September with anywhere from 80-100 employees. Despite my efforts to get sales staff engaged in the product, they haven't picked it up because it isn't intuitive enough nor does it work similarly enough to Facebook (despite the visual rip) for them to be comfortable with it. I've had continued issues with the UX (enter posts instead of creating a line break, can't edit posts or replies, no way to organize posts by chronological order only instead of whichever post has the latest response, showing when private groups are created on the public wall, the way it deals with files/attachments, users not understanding how to stop receiving the sludge of email notifications it sends by default -- not to mention how it doesn't strip email signatures when you reply that way -- and lots of other things) on top of some gnarly early-2000s-esque UI. The product just looks and feels broken and I've been interested in seeing how larger organizations use it because (and I think I've posted this sentiment on HN before) there's got to be tools out there that are better put-together and user-friendly (Jive, et al?). As such, our staff still relies on email, document servers and our internal CRM.

brown9-2• 14 years ago

Yes, a number of people at my company (with about 1000 people in it) tried to spread usage of it, but it only stuck with about < dozen people. Communicating through status messages doesn't really seem to give enough detail to anyone who needs to know.

BrianLy• 14 years ago

I'm not sure what you mean by communicating through "status messages". It doesn't seem like a good way to operate. Posts are not limited in the same way as Twitter messages. You can add various attachments, and create messages longer than 140 characters. In most companies email is the dominant form of communication and other tools (including discussion boards etc.) just don't get uptake because people drop back to email.

In very big companies (> 20k) there is more of a need for a tool that that can connect people in different "silos". I've seen how Yammer has helped people in this type of organisation.

pclark• 14 years ago

I've always loved the concept but found the products so crappy (visually and UX) that I can't keep in the routine of using them.

julianz• 14 years ago

Yep, we tried it and switched away from it because it simply didn't work; some messages failed to get through and it didn't seem to click with the team at all. I can't fathom what about it could be worth over a billion dollars.

pknerd• 14 years ago

Used it in last company, a good excuse to fool employees to stay away from Facebook yet use something similar at workplace.

_ea1k• 14 years ago

Previous (interesting) discussion here: http://news.ycombinator.com/item?id=4114546

tednaleid2• 14 years ago

Microsoft's acquisition of Groove Networks 7 years ago (http://www.microsoft.com/en-us/news/features/2005/mar05/03-1...) in a very similar space failed to ignite anything. I also rarely ever hear about groove anymore and haven't seen it used in the wild in about 5 years. I like yammer and have used it at the past couple of startups I've been at, but there's a good chance that yammer will be on the same downward path post-acquisition.

timthorn• 14 years ago

Groove got folded into the Sharepoint family - the technologies are still alive, I believe.

ghurlman3• 14 years ago

Alive, and used by practically no one.

sriramk• 14 years ago

From the rumors I heard, that acquisition was mostly about getting Ray Ozzie on board.

rprasad• 14 years ago

Groove is now Office Communicator (and parts of it are also now part of Sharepoint).

It is the enterprise IM software for any company that has legally-imposed archiving requirements for their communications.

Nobody talks about Groove or O.C. because it's not that type of product. It's a utility, not a toy.

samstave• 14 years ago

We used Groove years ago at lockheed and the adoption had to be forced down the throats of our teams because the app was too clunky.

We use Yammer now at work and it works pretty smooth, except there is still far too much activity that happens outside Yammer that reduces its potential value.

This is where I think that there is still a lot of room specifically for Salesforce and potentially linkedin, which could do really well in this space.

Obviously Salesforce has chatter and a range of utilities that are already in this space - but still a lot room to build some amazing tools.

cheez2• 14 years ago

This is a good thing.

bztzt• 14 years ago

To make it clear:

Groove -> Office Groove -> SharePoint Workspace (not SharePoint in general)

Office Communicator -> Lync (unrelated to Groove, internally developed from the start I think)

tednaleid2• 14 years ago

Ah, I didn't realize they'd rebranded it, because of course they did. I'm somewhat familiar with sharepoint, but have never used SharePoint Workspace, so I don't know if that's a marginalized utility within the Sharepoint infrastructure or if it's a big piece that really is getting a lot of use.

I wouldn't be surprised if in a year or two, yammer is also rebranded under the SharePoint name as something like SharePoint TeamChat 2013 Enterprise. If that happens, it'll likely drop off my radar as quickly as Groove did.

rhplus• 14 years ago

Some features of Lync came in part from the Parlano acquisition in 2007:

http://www.microsoft.com/en-us/news/press/2007/aug07/08-29Pa...

rch• 14 years ago

And so I will be closing yet another social media account.

It is nice that I have a specific reason (valid or not) this time, besides the usual vague feeling of dissatisfaction.

cheez2• 14 years ago

Does anyone know what their revenue/profit margins were like?

phmagic• 14 years ago

This might be blasphemy, but why not turn Sharepoint into a platform for the enterprise that developers can create software like Yammer for instead of snatching up these enterprise software companies for billions?

I've used and implemented Sharepoint. It's software that looks great on paper (or slide deck) with many bullet points about "integration" and "business requirements", but it's an absolute nightmare to use and deploy well.

damoncali• 14 years ago

I know a fellow who, while working at MSFT a few years back, proposed this very thing. Nobody bit.

chris_mahan• 14 years ago

because it would make the servers ever slower?

calydon• 14 years ago

Isn't that what Azure is all about? I don't know for sure. That's one of MSFT's classic flaws, too many options, too many platforms, too many ephemeral products.

josscrowcroft• 14 years ago

I love Yammer, so I'm really really hoping this doesn't become another AOL/WinAMP debacle.

vivekl• 14 years ago

With apparently 5 mn users, Microsoft just paid ~$200 per user... C.R.A.Z.Y. This just beat Instagram to a pulp as the yard stick for ridiculous valuation. When do I see an Oatmeal comic on this?

mikeryan• 14 years ago

Yammer charges $5-$15 per user per month. if everyone of the corporate users were charged $5 per month its $60 a user per year. How does that compare at all to a company which had no revenue?

mark_story• 14 years ago

The biggest difference is Yammer has a reasonably stable revenue source in its customers. Instagram has 0 paying customers that I'm aware of.

hncommenter13• 14 years ago

This is what keeps me from being a shareholder of Microsoft: that they are willing to pay ridiculous premia to purchase speculative or middling businesses.

Think about it this way. $1.2B in cash would purchase ~39.1 shares of MSFT stock, had they repurchased stock instead of buying Yammer (at today's open of $30.70/sh, per yahoo finance). Those shares have a proportional claim on $106.7M of after tax earnings over the last 12 mos (approx $2.73/sh, TTM, again per yahoo finance). $1.2B represents 1/250th of MSFT's market cap.

Even if Yammer grows revenues at 100% y/y for the next 10 years (it won't), its cumulative after-tax earnings won't come close to the benefit shareholders would have received--esp when discounted appropriately for the risk--had MSFT simply bought back $1.2B worth of stock.

Don't get me wrong, Skype represented even more egregious profligacy. But my point is that I (and many others) would be far more interested in owning MSFT stock if they fired the entire corp dev team and replaced them with a small laptop that merely issued orders to buy back stock every quarter.

Silicon Valley used to view MSFT as a rapacious shark. Now it sees MSFT as a well-heeled but dim tourist--an interloper that has more money than brains and is willing to spend exorbitant sums for shinky trinkets. Sadly, MSFT has warmed to the role.

KaoruAoiShiho• 14 years ago

Obviously this is strategic. Enterprise Social has a lot of room to expand, MS can do things that Yammer can't do on their own.

beedogs• 14 years ago

Can, but won't. What have they done with Skype in the year and a half since purchasing it?

I can't believe MSFT's shareholders haven't gotten rid of Ballmer yet.

hpatel• 14 years ago

Also, 1) potential to eventually sell MS products to yammer's customers. 2) being able to win other enterprise deals in competition with Salesforce/Oracle by being able to claim that you have something similar to Chatter.

kwamenum86• 14 years ago

http://www.wolframalpha.com/input/?i=1.2+billion+%2F+msft+pr...

rplnt• 14 years ago

I don't think there would be enough shares for that price so this is a very speculative comparison.

Microsoft agrees to $1.2bn purchase of Yammer

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