Microsoft’s buyout of Yammer cost a cool $1.2 billion, but a competitor says the buyout could raise questions internally at the company and affect Yammer’s operations.
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Want to work for Microsoft, or get them to buy you company? It might not be all green grass and roses, at least according to Yammer’s competitors
When Yammer was bought out by Microsoft for a relatively inexpensive $1.2 billion, it seemed like the start-ups strategy had worked: grow quickly, reach critical mass and then look for a buyer. Greats new, but what about the people who work there?
Stephen Rahal, communications director competitor Igloo Software, said the environments at Microsoft and Yammer are polar opposites; he said Yammer is about quick iteration, in terms of providing software updates.
On the Microsoft buyout, he said Microsoft is trying to catch up in the social enterprise space. He said Microsoft can’t provide fast updates, hence the Yammer buyout. Rahal also said integrating two completely different company environments is difficult, and Rahal added that Yammer could lose its agility – as he described it – which is one of the reasons it has been successful as a start-up.
Start-Up Culture Not Suited To Microsoft
On the reason why Microsoft bought Yammer, Rahal compared the buyout to Yahoo purchasing Flickr: the company didn’t continue its rate of progression once inside the company. Another example, he added, is Instagram being acquired by Facebook: what’s the reason? Facebook released the Camera app, which seemed to bring filters similar to Instagram’s that weren’t quite as good.
One of Instagram’s founder net $400 million, just 18 months after the app’s inception. Facebook CEO Mark Zuckerberg said he intends to keep the service as a standalone app, but it would be surprising if technology from the development team wasn’t used. That buyout costs Facebook $1 billion – $200 million less than it cost Microsoft to buy Yammer.
It’s too early to say what Yammer is going to do, but whether we’ll – as consumers – see any real remains to be seen. Some said on the buyout that Microsoft will use Yammer for enterprise, which is a key market for the company with Windows XP support ending in 2014 and Windows 8 launching this year (2012). The two probably aren’t connected that much, though.