
Microsoft agrees to $1.2bn purchase of Yammer - mehrshad
http://www.microsoft.com/en-us/news/Press/2012/Jun12/06-25MSYammerPR.aspx
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hncommenter13
This is what keeps me from being a shareholder of Microsoft: that they are
willing to pay ridiculous premia to purchase speculative or middling
businesses.

Think about it this way. $1.2B in cash would purchase ~39.1 shares of MSFT
stock, had they repurchased stock instead of buying Yammer (at today's open of
$30.70/sh, per yahoo finance). Those shares have a proportional claim on
$106.7M of _after tax earnings_ over the last 12 mos (approx $2.73/sh, TTM,
again per yahoo finance). $1.2B represents 1/250th of MSFT's market cap.

Even if Yammer grows revenues at 100% y/y for the next 10 years (it won't),
its cumulative after-tax earnings won't come close to the benefit shareholders
would have received--esp when discounted appropriately for the risk--had MSFT
simply bought back $1.2B worth of stock.

Don't get me wrong, Skype represented even more egregious profligacy. But my
point is that I (and many others) would be far more interested in owning MSFT
stock if they fired the entire corp dev team and replaced them with a small
laptop that merely issued orders to buy back stock every quarter.

Silicon Valley used to view MSFT as a rapacious shark. Now it sees MSFT as a
well-heeled but dim tourist--an interloper that has more money than brains and
is willing to spend exorbitant sums for shinky trinkets. Sadly, MSFT has
warmed to the role.

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KaoruAoiShiho
Obviously this is strategic. Enterprise Social has a lot of room to expand, MS
can do things that Yammer can't do on their own.

~~~
beedogs
Can, but won't. What have they done with Skype in the year and a half since
purchasing it?

I can't believe MSFT's shareholders haven't gotten rid of Ballmer yet.

~~~
dewiz
there's been a lot of work on skype, most of it coming in the next months. it
takes months or even years for two big companies to merge and align
strategies, not to mention products and tech are often shared behind the
curtains so you wouldn't know about progress until some big news or big
release, ie. wait till win8

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tednaleid
Microsoft's acquisition of Groove Networks 7 years ago
([http://www.microsoft.com/en-
us/news/features/2005/mar05/03-1...](http://www.microsoft.com/en-
us/news/features/2005/mar05/03-10grooveqa.aspx)) in a very similar space
failed to ignite anything. I also rarely ever hear about groove anymore and
haven't seen it used in the wild in about 5 years. I like yammer and have used
it at the past couple of startups I've been at, but there's a good chance that
yammer will be on the same downward path post-acquisition.

~~~
bztzt
To make it clear:

Groove -> Office Groove -> SharePoint Workspace (not SharePoint in general)

Office Communicator -> Lync (unrelated to Groove, internally developed from
the start I think)

~~~
rhplus
Some features of Lync came in part from the Parlano acquisition in 2007:

[http://www.microsoft.com/en-
us/news/press/2007/aug07/08-29Pa...](http://www.microsoft.com/en-
us/news/press/2007/aug07/08-29ParlanoPR.aspx)

~~~
gadders
Interesting to think that Parlano started as an in-house java chatroom/im tool
at UBS (the big Swiss bank).

I wonder if any of the team from UBS that were spun off made any money from
the acquisition.

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EGF
Did anyone else try out and use Yammer for awhile and then ultimately switch
away from it or off it it in favor of another tool or just back to email?

~~~
brown9-2
Yes, a number of people at my company (with about 1000 people in it) tried to
spread usage of it, but it only stuck with about < dozen people. Communicating
through status messages doesn't really seem to give enough detail to anyone
who needs to know.

~~~
BrianLy
I'm not sure what you mean by communicating through "status messages". It
doesn't seem like a good way to operate. Posts are not limited in the same way
as Twitter messages. You can add various attachments, and create messages
longer than 140 characters. In most companies email is the dominant form of
communication and other tools (including discussion boards etc.) just don't
get uptake because people drop back to email.

In very big companies (> 20k) there is more of a need for a tool that that can
connect people in different "silos". I've seen how Yammer has helped people in
this type of organisation.

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Chirag
Now Microsoft seems to be finally getting wiser, Yammer is a good purchase for
Microsoft. Specially if they can integrate it with Sharepoint and Office
Suite. This can turn out very cool product from MS in long time, now I can
only wish they down't screw up with a good product.

~~~
MartinCron
_Specially if they can integrate it with Sharepoint and Office Suite_

As a person who uses Yammer on purpose and Sharepoint only under duress, I
would prefer to keep them distinct.

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spinchange
Email isn't going anywhere (anytime soon), but I do think news-feed style
posts with threaded comments for lots of group communication is far preferable
to cc:->ALL. Smart buy for MSFT.

~~~
ams6110
That's what Lotus Notes was, right (news-feed style posts with threaded
comments). At least that how I saw it used, in the mid-late 1990s.

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dm8
"$1.2bn in cash"

Wow. Has there been any acquisitions north of $1bn with cash (and no equity)
buyouts?

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trapped123
This is really a good buy for Microsoft. Yammer has the potential to
eventually penetrate most of the medium to large enterprises. I have used it
and it really is great tool for multi-location organizations.

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jsight
Previous (interesting) discussion here:
<http://news.ycombinator.com/item?id=4114546>

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phmagic
This might be blasphemy, but why not turn Sharepoint into a platform for the
enterprise that developers can create software like Yammer for instead of
snatching up these enterprise software companies for billions?

I've used and implemented Sharepoint. It's software that looks great on paper
(or slide deck) with many bullet points about "integration" and "business
requirements", but it's an absolute nightmare to use and deploy well.

~~~
damoncali
I know a fellow who, while working at MSFT a few years back, proposed this
very thing. Nobody bit.

~~~
chris_mahan
because it would make the servers ever slower?

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josscrowcroft
I love Yammer, so I'm really really hoping this doesn't become another
AOL/WinAMP debacle.

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davidcollantes
Never heard of Yammer until now. The buying price is a lot; I remember the
days when millions were only used (born in the sixties).

Anyway, yet another company swallowed by Microsoft. Whether it will "live" or
"die", it is too early to tell.

~~~
bad_user
We've used Yammer inside our small company, but quickly gave up on it because
we are few and I think Yammer is a lot more useful in big companies were you
should keep up to date on what the other groups around you are doing.

The implementation is pretty solid though and I liked the features provided.
It really is Twitter for the Enterprise, so this acquisition makes sense for
Microsoft.

Some smart people like Coda Hale also work there. I wonder if they'll leave or
not.

~~~
codahale

        Some smart people like Coda Hale also work there.
        I wonder if they'll leave or not.
    

Oh heeeeell no.

~~~
harshaw
well at least we know that someone is incentivized :) congrats

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ckluis
Can you say Facebook style communication > sharepoint?

Good purchase.

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rch
And so I will be closing yet another social media account.

It is nice that I have a specific reason (valid or not) this time, besides the
usual vague feeling of dissatisfaction.

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cmwelsh
How does this compare to Salesforce's Chatter? They seem to be the same thing,
but I've heard Yammer is much better. I've only used Chatter.

~~~
michaelbuckbee
Chatter is more like a private enterprise version of Twitter (small messages,
'I'm working on X right now')

Yammer is more like a private enterprise version of Facebook, lots of groups
and media postings and timeline/widgets commenting similar to Facebook.

~~~
Mystitat
I think Chatter is closer to your description of Yammer than Twitter. It
really revolves around groups and updates on objects, and it has private
messaging now.

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cheez
Does anyone know what their revenue/profit margins were like?

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vivekl
With apparently 5 mn users, Microsoft just paid ~$200 per user... C.R.A.Z.Y.
This just beat Instagram to a pulp as the yard stick for ridiculous valuation.
When do I see an Oatmeal comic on this?

~~~
mikeryan
Yammer charges $5-$15 per user per month. if everyone of the corporate users
were charged $5 per month its $60 a user per year. How does that compare at
all to a company which had no revenue?

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mindcrime
This is going to be interesting; sleep with one eye open, Mr. Ballmer, sleep
with one eye open...

Edit: for the downvoters who probably don't "get" the reference, out startup
(Fogbeam Labs) are now competing with Microsoft since we're in this same
"enterprise 2.0" space as Yammer.

Anyway, Mr. Ballmer... "never mind that noise you heard, it's just the beast
under your bed." :-)

~~~
mindcrime
And this is why I love HN... Nothing like showing a little support for one of
our own. :-)

It's not like we're the scrappy, underdog competitor, building Open Source
products that will contribute to the world whether we ever make a dime or not,
while Microsoft are the original Evil Empire of Software - monopolistic,
profiteering gluttons who will do anything to make a buck.

 _le sigh_ it's all right, I still love you guys anyway. :-)

~~~
kprobst
You seem to come across as petulant rather than someone who is challenging an
entrenched competitor with innovation or whatever. Less talking, more doing.
Just a thought.

~~~
mindcrime
_You seem to come across as petulant rather than someone who is challenging an
entrenched competitor with innovation or whatever._

I'm not sure how "petulant"[1] fits into this, but OK.

 _Less talking, more doing. Just a thought._

We don't do a lot of talking, is the thing. One offhand comment on HN so
far... I have to say, I'm a bit surprised at the downvote frenzy. No Metallica
fans here, I suppose. _sigh_

As for doing, if you find somebody doing more "doing" than we do, mark it down
on a calendar. I've coded until my wrists feel like they're about to fall off,
put in 100 hour weeks for week after week after week after week after week,
flown back and forth from Chicago to RDU dozens of times just to keep in touch
with my co-founders, and sacrificed more opportunities to go out with my
friends, go on dates, or otherwise have fun, than I can count... to write
code, do customer development work, do market research, competitive
intelligence, you name it. If we fail, it won't be for lack of "doing," that I
can promise.

Geez, I'm not usually so defensive either, but I find your comment amusing
given the circumstances.

Anyway, back to the grind...

[1]: <http://dictionary.reference.com/browse/petulant> _moved to or showing
sudden, impatient irritation, especially over some trifling annoyance_

