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Originally published June 17, 2012 at 8:02 PM | Page modified June 18, 2012 at 6:22 AM

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Yammer acquisition would boost Microsoft's social-business tools

At first, social networking was a novelty, a fun thing you did for your social life. Then businesses came on board, seeing how everything...

Seattle Times technology reporter

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At first, social networking was a novelty, a fun thing you did for your social life.

Then businesses came on board, seeing how everything from Facebook-like interactivity to Twitter-y updates could help get their messages out.

Now, social networking has become so much the norm that businesses are trying to figure out how best to use it within their own companies and networks to drive results.

Indeed, social networking for businesses is seen as a next big thing.

"It's going to be something like email that's going to be ubiquitous and that people are going to expect to use in combination with a lot of different applications," said Rob Helm, an analyst with the independent research firm Directions on Microsoft.

Look no further than Yammer, a San Francisco-based company that offers social-networking and content-collaboration tools for businesses. It's one of several such companies, including Jive and Socialtext.

Microsoft is reportedly in talks to acquire Yammer for $1.2 billion, according to several media accounts.

Microsoft declined to comment and Yammer did as well.

Though seen as a next big thing, Microsoft "has missed the market" in terms of providing easy-to-use Facebook-like features as part of its business-collaboration offerings, said Kevin Conroy, president of Blue Rooster, a Seattle-based tech and consulting firm that specializes in building collaborative social-business websites for corporations.

Collaborative tool

Microsoft has SharePoint, its collaboration solution for business that includes some features of social networking, such as the ability to do status updates.

But "they're stand-alone features," Conroy said. "The features don't talk to each other. ... You can do status updates but it doesn't tell your community the updates. The status and the community do not communicate with each other."

And SharePoint can be cumbersome, several analysts said.

That's the void that companies such as Jive, Yammer, NewsGator (which provides an add-on to SharePoint) and Conroy's own Blue Rooster fill. Blue Rooster has an offering called Sepulveda that's built on the SharePoint platform.

A Yammer acquisition by Microsoft — if true — would be a good defensive move against companies such as Jive, Conroy said, adding that "this may get Microsoft back in the game."

What Microsoft would do with Yammer, of course, would be the next question.

Analyst Michael Cherry, with Directions on Microsoft, thinks the software giant may continue to leave Yammer fairly independent, much as it has done with Skype, its last major acquisition.

"It's a good consumer play," Cherry said, as well as a good defensive move to prevent other companies from acquiring Yammer's technologies.

He points to Yammer's user interface, which is remarkably similar to Facebook's, from the blue band on top of the page, to the list of a user's groups and apps on the side, to the news feed down the middle.

Potential position

Microsoft could target Yammer to small organizations such as PTAs or soccer clubs, small businesses or anyone who has small group projects that come and go, he said.

Meanwhile, Cherry added, Microsoft could also position Yammer as "the gateway drug to SharePoint" or keep SharePoint mainly for large business customers.

Analyst Helm says while Microsoft would likely keep the Yammer service alive for consumers, it would probably also work to integrate Yammer's social-networking capabilities into its own products.

The key, he thinks, if acquisition rumors are true, will be seeing if Microsoft "gives Yammer people enough running room to accomplish something in the social-networking realm."

Janet I. Tu: 206-464-2272 or

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