Monday Grok: Microsoft buying Yammer for $1.2 billion, apparently

And Redmond will announce its own iPad killer today, apparently

Microsoft has apparently kicked in $1.2 billion to buy business focused social networking outfit Yammer.

This report from <i>Bloomberg</i> on Saturday gives you the gist of suggested deal. For some context there’s also this <i>Techcrunch</i> story — an interview with Nitin Bhatia, a MS exec for two decades who has a long history with the company’s SharePoint collaboration products.

It will be kind of embarrassing if it doesn’t happen — not for Microsoft or Yammer — for pretty much everyone in the tech media (and yes bloggers that means you too). The deal is being so widely reported that you would be mistaken for believing it’s actually happened. For the record, as at 7.32 am AEST, the parties are still refusing to comment.

Yammer was founded about four years ago and allows companies to create internal Facebook like functionality for its people. About 200,000 companies use the service. It taps into the idea that the social network we spend most of our day actually interacting with is the one which includes the very people who sit within about 10 feet of our cubicle at the office. If true, this is another big bet for Microsoft, following on from the likes of its $8.5 billion acquisition of Skype last year.

Being critical would be easy, but in fact Grok has come to admire Redmond’s determination to buy its way back onto Broadway. For anyone under 30 years of age, it’s hard to imagine that the kind of acrimony that Google and Facebook routinely draw now from privacy and consumer advocates was once directed at Microsoft.

But it was the 800 pound Gorilla that everyone feared and yet felt oddly compelled towards. Indeed, when former CEO Bill Gates crushed Netscape’s under the weight of the Microsoft ISV community at the end of the 1990s it looked to all the world like Microsoft would dominate the Web space, as it has the desktop. But that hasn’t happened. Not by a long shot.

So on behalf of middle-aged washed up old-has-beens everywhere, as a paid up member of the club, Grok is cheering them on. And we are not the only ones. <i>Venture Beat</i> says critics of the deal such as PandoDaily’s Sarah Lacy have got it all wrong. “This is the best Silicon Valley deal we’ve seen all year. Facebook’s $1 billion purchase of Instagram makes Microsoft’s pickup of Yammer look like the Louisiana Purchase by comparison.”

<i>Forbes</i>, in a short piece overnight noted that, “The purchase of Yammer by Microsoft could potentially add additional functionality, such as file sharing and chat, to Microsoft Office, which generates more than half of Microsoft’s annual operating income.”

Macroscale multitasking

Microsoft, unlike say Apple, has never had a problem with multitasking. So in addition to its likely (probably, maybe, rumoured) purchase of Yammer, the company is also apparently looking at launching its own line of tablets today to rivaltheipadgestalt (it is such a common suggestion these days that we thought we would make up a word for it).

According to a report in <i>TheWrap</i>, the announcement is set down for later today. There are precious few details though with TheWrap simply noting that, “Rumors have surfaced that Microsoft's new tablet will run on Windows RT, a version of Windows 8 that uses an ARM microprocessor.”

<i>ReadWriteWeb</i> suggests we focus on the cost. “The company is said to be planning to charge $85 for inbuilt support for Office, and additional fee could bump the cost of devices up and make them more expensive than their equivalents in Apple’s iPad family.”

For Grok, Microsoft will be a fascinating company to watch over the next few years if it can pull together all the strands of its strategy. The combination of Xbox, Skype, Bing, Yammer and mobility should be killer bee. But what a mad and disparate clash of cultures and ideas to try and absorb and conflate into an incumbent as distinct and anchored as Microsoft.

Andrew Birmingham is the CEO of Silicon Gully Investments. Follow him on Twitter @ag_birmingham.

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