(Reuters) – Microsoft Corp agreed to buy online social network firm Yammer Inc for $1.2 billion in cash, which will allow the software company to offer a service like Facebook Inc’s to corporate customers.
Talk of a deal had circulated earlier this month, but the two companies only confirmed the deal on Monday.
Four-year-old Yammer, which has 5 million users of its private, in-company social networks, will become part of Microsoft’s Office unit under Kurt DelBene but will still be led by current Chief Executive David Sacks.
Microsoft shares were down 3 percent at $29.77 on Nasdaq.
Backers in Yammer invested more than $100 million in the company, and include Charles River Ventures, Emergence Capital Partners, US Venture Partners, Founders Fund and Draper Fisher Jurvetson.
(Reporting By Bill Rigby; Editing by Gerald E. McCormick and Jonathan Marino)
Image Credit: Microsoft