Microsoft Paid $1.2B for Yammer, But You Can Have It for Free

By Caleb Garling

David Sacks, CEO of Yammer, the company that’s bringing a new breed of social network to Microsoft. Photo: Jim Merithew/


Microsoft just paid $1.2 billion for Yammer. But it still plans on giving away the company’s social-networking service for free.

At least, that’s the word from David Sacks, the CEO of Yammer, a San Francisco outfit whose service is best described as Facebook for use inside businesses. The almost-4-year-old company is part of a new breed of startup that seeks to find its way into the world’s businesses by offering a free service that office workers will start using on their own. The idea is that once their employees are hooked on the product, businesses will pay for tools that give their IT departments more control over the thing.

According to Sacks, Yammer will stick with this “freemium” model as it moves under Microsoft’s wing, and it will use the strategy to encourage adoption not only of its own products, but existing Microsoft tools as well. Microsoft declined to comment for this story, but clearly, the company is working to change the way its core business operates in order to keep up with the latest wave of tech outfits.

“Everybody has shifted to this model because its so compelling to let the end users try the software before [businesses] buy it,” Sacks tells Wired in his first interview since the big acquisition. “We’re going to look to see if Yammer can keep fueling its own growth — but fuel the growth of Office 365.”

Office 365 is the online incarnation of Microsoft’s venerable Office suite of business applications that includes such familiar tools as Word and Excel. In launching the latest version of Office earlier this month, Microsoft CEO Steve Ballmer said that the software giant would eventually integrate Yammer with various Office applications.

Ballmer called Office “the most important product we sell,” and though the suite is still a mainstay in businesses across the planet, it’s getting some serious competition from Google Apps — the search giant’s suite of business apps, which operates entirely online.

“Google is cutting into Microsoft’s business for both email and personal productivity suites — the latter, by slow attrition rather than direct replacement,” read a report from research outfit Gartner in May of this year. “Compared with Microsoft, Google appears to be winning one-third to one-half of new, paid-for, cloud-based office system seats.”  Read More


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A Revolution in Social Networking

Posted on July 26, 2012, in #technology and tagged , , , , , . Bookmark the permalink. Leave a comment.


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