Microsoft announced a definitive agreement to acquire enterprise social-networking company Yammer for $1.2 billion in cash on June 25, 2012. The acquisition closed on July 18, 2012. Microsoft’s announcement and its FY2012 annual report report $1.2 billion, while a later FY2013 filing reports $1.1 billion; the records cited here do not explain the difference.
What Microsoft announced
Microsoft said it would acquire Yammer, a provider of enterprise social networks, in an all-cash transaction. The announcement described Yammer as a service launched in 2008 with more than 5 million corporate users and employees at 85 percent of Fortune 500 companies. Those are figures Microsoft gave in June 2012, not current user or customer counts. Microsoft’s June 25, 2012 announcement
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Why Microsoft said it wanted Yammer
Microsoft presented Yammer as an addition to its cloud portfolio and said it intended to accelerate the service’s adoption alongside SharePoint, Office 365, Microsoft Dynamics and Skype. Its quarterly earnings release described the deal as bringing enterprise social-networking features to Microsoft communications and collaboration products. This was the company’s stated rationale; it does not by itself establish what the integration later achieved. Microsoft FY2012 Q4 press release and webcast
How much did the acquisition cost?
The headline $1.2 billion figure is the announced cash price. Microsoft’s announcement and FY2012 annual report both give that amount. However, Microsoft’s FY2013 annual-report business-combination note reports $1.1 billion in cash for the acquisition. These are differing figures in Microsoft’s own records, and the cited documents do not reconcile them. It is therefore more precise to call $1.2 billion the announced amount and identify the $1.1 billion figure as the later accounting disclosure, rather than treating the two as interchangeable.
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| Record | Amount and context |
|---|---|
| Microsoft announcement, June 25, 2012 | $1.2 billion in cash for the definitive agreement. Source |
| Microsoft FY2012 annual report, subsequent-event note | $1.2 billion in cash for the July 18, 2012 acquisition. Source |
| Microsoft FY2013 annual report, Note 9: Business Combinations | $1.1 billion in cash for the July 18, 2012 acquisition; the note does not explain the difference from the earlier $1.2 billion reports. Source |
When the deal closed and how Yammer was organized
Microsoft reported that the acquisition closed on July 18, 2012. The announcement said Yammer would join Microsoft’s Office Division and that the Yammer team would continue reporting to CEO David Sacks. Microsoft’s acquisition-history page lists Yammer under 2012 with a June 25 press-release date. Microsoft acquisition history
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the $1.2 billion headline does—and does not—tell you
The figure describes a corporate acquisition, not a consumer product price or an amount paid by individual Yammer users. The available company records establish the announced deal, closing date, organizational placement and Microsoft’s stated strategic intent. They do not, on their own, establish Yammer’s post-acquisition performance or the financial return Microsoft earned from the transaction.
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