Microsoft's Billion-Dollar Buy -- Is It a Smart Move?

Microsoft is buying Yammer -- the self-described "Enterprise Social Network" -- and jumping into a space that's pretty robust. Recent IPO Jive Software has pulled back really strongly since April but is still above its IPO price. It's worth about $1.2 billion.

On June 5, Oracle bought Collective Intellect, a company that does social intelligence.

The day before that, salesforce.com bought Buddy Media for $689 million -- which focuses on social-media marketing -- and had bought its own social-media monitoring company Radian6 last year for $326 million. Before that, it had spent $212 million for the purchase of Heroku, a company with a cloud-based application platform focusing on -- you guessed it! -- social and mobile.

Obviously, this is a space that's very active among tech giants, and it's one where buying is more popular than internal R&D developments. While Eric wasn't a fan of Microsoft's costly Skype acquisition, he sees some very real potential for this buy to help improve not just Office, but keep Microsoft's Dynamics division competing with Oracle and Salesforce as well. To see his full thoughts, watch the following video.

Microsoft, Oracle, salesforce.com, and a host of other companies have pushed deeper into social integration across the past year. However, if you're looking to profit from the trend, there's a market leader dominating the business market that has growth rates smoking all these companies. We've created a new report, "Forget Facebook -- Here's the Tech IPO You Should Be Buying," that details a much better social-media stock that has a longer runway for growth than even Facebook itself. The report won't be available forever, so click here to get access today - it's totally free.

At the time this article was published Eric Bleeker owns shares of no companies mentioned above. The Motley Fool owns shares of Oracle, Microsoft, and salesforce.com. Motley Fool newsletter services have recommended buying shares of salesforce.com and Microsoft, creating a bear put spread position in Salesforce.com, and creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Michael Curry

We are one of the largest cloud Lync providers operating in the USA and we are excited to the fact that Yammer could be integrated with the Microsoft product set. Social media is a much needed tool within the ecosystem of any company whereas it takes collaboration to it next level. Nothing in the market today comes close to the ease of use and productivity that Lync brings to the table either in a dedicated server environment or in the cloud like Workspace Communications provides. Great job Microsoft, I’m sure the folks over at AVAYA, Cisco and ShoreTel are wondering what to do next.

June 18 2012 at 1:11 PM Report abuse rate up rate down Reply