April 1, 2023

DealBook: Microsoft to Buy Yammer for $1.2 Billion

Microsoft announced on Monday that it will buy Yammer, a social network service for businesses, for $1.2 billion in cash, as it seeks to strengthen its enterprise software business and compete more directly with Salesforce.com.

Under the terms of the expected deal, Yammer will be added to Microsoft’s office division and will continue to be led by David Sacks, its chief executive.

Yammer, which calls itself “the enterprise social network,” is a sort of Facebook for business. Its Web-based service allows companies to create private social networks, where employees can privately chat, shares files and collaborate on projects.

“The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love,” Steve Ballmer, Microsoft’s chief executive, said in a statement. “Yammer adds a best-in-class enterprise social networking service to Microsoft’s growing portfolio of complementary cloud services.”

It was co-founded in 2008 by Mr. Sacks, a former PayPal executive who spun the business out of Geni, a genealogy and social networking site.

Over the past four years, the service has grown at a rapid clip, as more companies turn to the Web for secure solutions to enhance inter-office communication and collaboration. Yammer, which offers both free and subscription services, has more than five million users and is used by more than 85 percent of Fortune 500 companies.

It has raised a total of $142 million in venture capital, recently adding $85 million in late February, in a financing round led by Draper Fisher Jurvetson. The company’s roster of investors and board members is stacked with former Facebook executives and members of the so-called PayPal mafia. Founders Fund, the venture firm led by PayPal cofounder Peter Thiel, and Social+Capital, a firm partially backed by Facebook, are both major backers. Sean Parker, the former president of Facebook and an executive general partner at Founders Fund, is a board member.

The marriage of Yammer and Microsoft which also invested in Facebook — makes sense, given the importance of the enterprise consumer to Microsoft and recent moves by Yammer to align itself closer to the software giant. In April, Yammer acquired oneDrum, a British start-up focused on file sharing and enterprise collaboration solutions, for an undisclosed sum.

“When we started Yammer four years ago, we set out to do something big,” Mr. Sacks said in a statement. “We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

Microsoft’s pursuit of Yammer comes as the enterprise market converges with the consumer Web. Traditionally, a company’s technology purchasing decisions were made top-down, controlled by a handful of information technology experts. That model is rapidly eroding with the rise of Web-based services that are created to be lightweight and user-friendly. Start-ups like Yammer reel in consumers with free versions. Those consumers then become evangelists at their companies, encouraging their employers to adopt the application and pay for a premium subscription.

A Yammer acquisition will allow Microsoft to compete more directly with Salesforce, which offers a similar messaging product called Chatter. Salesforce has also been aggressive in adding social-related applications to its portfolio, recently spending $689 million for BuddyMedia, a social marketing business that works with companies like Ford Motor and L’Oreal. The service helps companies build and manage their advertising campaigns across social networking sites, like Twitter and Facebook.

Article source: http://dealbook.nytimes.com/2012/06/25/microsoft-to-buy-yammer-for-1-2-billion/?partner=rss&emc=rss

Bits Blog: Google Adds Posts From Its Social Network to Search Results

Google excels at responding to search queries with links to Web pages, but those have become old-fashioned. These days, the company has concluded, Internet users increasingly want to find conversations and photos posted by their friends on the social Web.

On Tuesday, Google plans to take its biggest step yet toward incorporating social networking posts from its Google+ service into its search results.

Google says that the new feature, which it calls Search Plus Your World, is one of the biggest changes it has ever made to its search results. People will see posts and photos from their friends, profiles of their friends when they search people’s names, and conversations occurring on Google+ related to topics they search.

“What you search today is largely written by people you don’t know; we call that the faceless Web,” said Amit Singhal, a Google fellow who oversees search. “Search Plus Your World transforms search and centers it around you.”

Google has risked being shunted aside for failing to get on board with the social Web. Its new offering comes eight years after Facebook started and in the weeks before it is expected to file for an initial public offering, the most eagerly anticipated tech offering since Google went public and what is likely to be the crowning moment for the new social Web.

To keep up, Larry Page, Google’s chief executive, prioritized social networking after high-profile fumbles, like the Buzz social networking service, and tense volleys with Facebook, which does not allow Google to include most of its pages in search results.

Last summer, the company introduced Google+. From the beginning, the idea was not to replace Facebook, but to supply Google with social information that it could use in its other products, mainly search.

Search Plus Your World is the result of that. When Google users are logged into a Google service, like Gmail, their search results will show posts from people they have included in their circles on Google+.

For instance, for most users, a search for “chikoo” would show links and photos of an Indian fruit. But for friends of Mr. Singhal, it would also show photos and posts about his dog, who is named Chikoo. A search for a sports team would show, in addition to the usual links, conversations about the team among a user’s friends on Google+.

People only see personal posts if they have access to those posts on Google+, either because the posts are public, or because they have chosen to include the person who posted the items in a Google+ circle and the person has shared the items with them.

In addition, when people search for a name, Google will automatically suggest people who are friends with the person on Google+ or prominent people. And when people search for general topics, like “music” or “cooking,” Google will show related Google+ conversations on the right-hand side of search results.

Google users can click a link on the search results page to see only personal posts, or to turn off the new feature and see only the standard search results. For users who are signed in to Google, all search results will be encrypted using a secure connection.

Users who are not on Google+ will see items they have shared with Google, like photos they have uploaded to its Picasa service, and items posted publicly on Google+ by people that Google assumes they know because they communicate with them on Gmail, for instance.

Google+ has its fair share of spam-like comments and uninteresting posts. Mr. Singhal said Google has created algorithms to only show the most relevant posts in search results. For example, it guesses how close a user is to a friend on Google+ based on how often they communicate and which of a user’s circles are most relevant to them based on how often they contact people in the circles.

“Our job is to provide relevant suggestions, and just because someone is discussing something on Google+, if it’s not prominent enough, we don’t want to bring it to the search results page,” Mr. Singhal said.

What if spam-like Google+ posts written by a friend still make their way to search results? “Then you have to re-evaluate being friends with him,” Mr. Singhal said.

Article source: http://feeds.nytimes.com/click.phdo?i=9876f623fdef11778b75916b8e09ffbc