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GROWTH THROUGH ACQUISITION

Microsoft Acquires Yammer for $1.2 Billion

After meteoric user-growth and a fresh $85 million infusion of funding, the social network for business was just acquired by Microsoft.
Yammer Founder David Sacks
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How's this for a status update: Yammer, the enterprise-level social networking site, confirmed rumors today that it has been acquired by Microsoft for $1.2 billion in cash.

The four-year-old San Francisco start-up was co-founded by David Sacks, a former PayPal executive, and Adam Pisoni, a software engineer that had previosly worked at Geni.com. The two conceptualized and built a Facebook-like platform on which employees could send messages and photos to each other, load status updates, and manage projects off of e-mail. 

Yammer's official acquisition Monday—it had been rumored for weeks—came after a meterioc rise establishes it as one of the fastest growing enterprise software companies in history. According to its website, the site has attracted more than five million users in the past three years. The company has more than 400 employees. More than 85 percent of Fortune 500 use Yammer.

Since its first round of financing in January 2009, the company has raised $142 million in venture funding, completing its most recent round for $85 million, in February. That round was led by DFJ Growth, a venture firm in Silicon Valley.

According to the company's blog post, the acquisition will help make Yammer an integral part of Microsoft software, including SharePoint, Office365, Dynamics and Skype.

In the post, Sacks--who recently celebrated his 40th birthday with quite a bang--noted:

"When Adam Pisoni and I started Yammer, we set out to do something big. When most people thought social networking was for kids, we had a vision for how it could change the way we work."

So how does Sacks work? A 2011 profile of Sacks in Inc. provides a window into the world of a CEO building a billion-dollar company. Sacks said:

"I check Twitter every day. I read every single tweet that mentions Yammer. I also get Google Alerts, so anytime somebody writes about us online, I read it. I want to know what people are saying, so I can keep improving the product and the company. Disconnecting is very hard for me. I think about work constantly. I wish I had an On/Off switch. My wife is good at bringing it to my attention. We'll be at dinner or spending time with the kids, and she'll notice me tuning out. I'm trying to get better."

He continued, "I don't believe in hobbies—if you are really passionate about something, it should be your job—but I do like to play poker."




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