Microsoft (MSFT) announced that they bought Yammer Inc. for $1.2 billion in cash, joining other high-priced tech acquisitions like Facebook (FB)’s acquisition of Instagram. Yammer is a social network for businesses, similar to Facebook but focused more on intra-company networking.
Microsoft plans to continue Yammer as its own service, and is currently exploring possibilities of incorporating the service into their Office suite. They have had a product called SharePoint that shares some of the same features as Yammer, it is not frequently used for document sharing or other collaboration.
Yammer currently has 4 million users, but only 20% of those are paying for premium services, according to TechCrunch. Microsoft will now be challenged with optimally monetizing Yammer.
Business Section: Investing Ideas
The acquisition of Yammer allows Microsoft to enter into the social media services for enterprises market where Oracle (ORCL), Salesforce (CRM), and IBM (IBM) have already been attempting to dominate. If implemented correctly, Yammer may present a major threat to the other companies’ market share.
Read below to compare some key statistics of Microsoft with their competitors in the social media market.
List sorted by market cap.
1. Microsoft Corporation (MSFT, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $246.48B, most recent closing price at $29.34. P/E ratio at 10.86. The stock has returned 2.73% over the past month.
2. International Business Machines Corp. (IBM, Earnings, Analysts, Financials): Provides information technology (IT) products and services worldwide. Market cap at $225.04B, most recent closing price at $195.10. P/E ratio at 14.38. The stock has returned -1.65% over the past month.
3. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world’s most popular search engine. Market cap at $182.27B, most recent closing price at $559.05. P/E ratio at 17.0. The stock has returned -7.12% over the past month.
4. Oracle Corporation (ORCL, Earnings, Analysts, Financials): Develops, manufactures, markets, distributes, and services database and middleware software, applications software, and hardware systems worldwide. Market cap at $133.88B, most recent closing price at $26.91. P/E ratio at 14.09. The stock has returned 5.74% over the past month.
5. Facebook, Inc. (FB, Earnings, Analysts, Financials): Market cap at $60.49B, most recent closing price at $28.29. P/E ratio at 103.42. The stock has returned -2.94% over the past month.
6. Salesforce.com (CRM, Earnings, Analysts, Financials): Provides customer and collaboration relationship management (CRM) services to various businesses and industries worldwide. Market cap at $17.85B, most recent closing price at $129.36. The stock has returned -8.24% over the past month.
Written by Danny Guttridge
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