Microsoft Buying Yammer for $1.2B

Microsoft is paying $1.2 billion to buy Yammer, an Internet startup that has built a social network similar to Facebook for the business world. The deal announced today comes nearly two weeks after word of Microsoft's negotiations with Yammer first leaked out in published reports. Yammer provides ways for companies to create private social networks for their employees. It has more than 5 million corporate users.

The acquisition represents Microsoft's latest attempt to adapt to a major shift in the technology industry, one that is fueling demand for more Internet services and social-networking tools. That shift is threatening to weaken Microsoft's position as the world's largest software maker. Last year, Microsoft Corp. bought Internet video chat service Skype for $8.5 billion in the biggest acquisition in the company's 37-year history. Yammer, which is based in San Francisco, has raised about $142 million since its inception four years ago.