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Microsoft Pays $1.2B for Corporate Facebook Mimic

• Caleb Garling via WIRED.com

Microsoft has agreed to purchase Yammer, a San Francisco startup that offers a Facebook-like social network designed specifically for businesses.

The acquisition had long been rumored, but on Monday, Microsoft confirmed that it had agreed to purchase the San Francisco startup for $1.2 billion in cash. Yammer is just one of many services that seek to duplicate Facebook’s success inside the world’s business, including Salesforce.com’s Chatter and IBM’s Connections.

“Yammer was built on a notion that things can grow virally,” Microsoft CEO Steve Ballmer said during a conference call with reporters. “The consumerization of IT is a trend that perhaps more than any other company out there, Yammer has gotten right.”

Founded in 2008, Yammer now claims more than 5 million corporate users, and its customers include such names as Deloitte, Ford, and 7-11. Like many new-age business apps, it began as a free web service, and as people started using to service to set up ad hoc social networks inside their companies, Yammer introduced a for-pay service that beefed things up for corporate IT departments.

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