Microsoft is in discussions to acquire Yammer, a social media and communication platform for businesses, according to a report in Bloomberg, which cited two anonymous sources.
Microsoft is prepared to acquire the company for a US$1 billion purchase price, the report said, and the deal could be reached as soon as Friday.
Microsoft and Yammer declined to comment for this story.
The acquisition would follow a handful of recent deals in which CRM providers acquired smaller firms specializing in some aspect of social media or marketing.
Oracle acquired Vitrue, for example, while Salesforce.com just nabbed Buddy Media.
However, a Microsoft-Yammer deal would not be in the same league — despite the reported $1 billion price tag, said Trip Chowdhry, managing director of equity research for Global Equities Research.
Too Late for Microsoft
“Simply put, it is too late for Microsoft to get into social marketing,” Chowdhry told CRM Buyer. “This would not be a significant deal for either company — or the industry, for that matter — for that reason.”
The CRM-business social media market niche is already dominated by Salesforce.com and Oracle, Chowdhry said. Furthermore, both companies — and Salesforce.com by a wider margin — are offering functionality that is far more sophisticated than anything Microsoft could ramp up with Yammer.
“Chatter has been active for three years now,” he noted, referring to Salesforce.com’s popular social communication tool. Last month, for example, it announced forthcoming upgrades, Chatter Messenger and Chatter Screensharing.
Can’t Top Chatter
If Microsoft incorporates Yammer into its Microsoft Dynamics CRM product, it will certainly bolster its capabilities and make the application more social, Sanjiv Gulati, associate vice president for cloud applications at Persistent Systems, told CRM Buyer.
It still wouldn’t be as closely integrated as Chatter is with Salesforce, he added.
“Chatter allows for collaboration around business processes within the application,” explained Gulati. “For example, you can follow records — which is very useful for a sales rep to be able to get updates on his or her high-value opportunities in real-time. You can also post dashboard components to profiles or feeds, so employees can have conversations around the data. And you can even take action on any approval process from within your Chatter feed.”
How Yammer Could Help Microsoft
It is no secret that Microsoft Dynamics CRM has been lagging with its social media push. Certainly, there has been an effort to play catch-up through new features in every upgrade. Earlier this year, for example, its service update included additions to its Activity Feeds that let users “like” and “unlike” status updates, among other enhancements.
Microsoft Dynamics CRM has an established and widespread customer base and partner ecosystem, which means it isn’t going anywhere, and its users and partners will surely appreciate the social enhancements that a Yammer acquisition would bring.
“As a Microsoft Dynamics CRM partner, we would love to see Microsoft purchase Yammer, because we believe that they would eventually leverage Yammer’s enterprise social networking features into the CRM product,” Mike Snyder, principal of Sonoma Partners, told CRM Buyer.
“Microsoft Dynamics CRM does include some strong social networking features today, but obviously Yammer has a lot to offer to make the social capabilities more complete,” he said.
Yammer would bring to the table strong cross-platform support for Android, BlackBerry and iOS, as well as a standalone desktop application, which Microsoft Dynamics CRM does not have today, Snyder noted.
More important than just software capability, he continued, is that Yammer would likely become the single social software across all Microsoft products, like SharePoint and Office.
“Right now, each of these groups is doing its own thing,” Snyder pointed out, “so it would be outstanding if these social features all worked together better and had a single access, single SDK and so on.”
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