Microsoft Monday said it would spend $1.2 billion cash in a much-anticipated acquisition of Yammer, a sort of Twitter for businesses.
The nearly 4-year-old startup is only the latest acquisition in a string of similar deals. Earlier this month, Salesforce.com spent $689 million to buy Buddy Media, which makes Facebook tools for interacting with customers. Oracle last month bought Virtue, which helps companies coordinate social network posts, for $300 million. And analysts expect acquisitions of "Facebook for business" plays to continue.
So who will be next to score in the social-meets-business lottery? Here's a shortlist of top contenders:
- Atlassian. This Australian software company makes tools for programmers, but has broadened its focus with tools like HipChat, a group discussion app Atlassian acquired earlier this year. The company's best-known product is probably Confluence, a corporate wiki. "They have been making huge strides in adding the social element to their products," says Alan Lepofsky, an analyst with Constellation. "They have elevated themselves, in my mind, to the next big one."
- Huddle. The 6-year-old London- and San Francisco-based company counts Disney, wine and spirits giant Diageo, and the government of the United Kingdom among its customers. The cloud-based service is used to share files and collaborate on documents, much like Microsoft SharePoint. Katy Ring with the IT consultancy K2 Advisory says she's waiting for someone to snap the company up. "We will see a lot more consolidation in the social media market over the next year," Ring says. "This is a land-grab market mentality."
- __Moxie. __Started in 2006, Moxie Software offers a bewildering array of services. It will monitor your customers' tweets, help your internal teams manage projects, oversee your intranet and set up chat and email systems for you. Lepofsky sees it as acquisition bait.
With big tech companies clearly willing to shell out big bucks to get some social software magic, plenty of additional enterprise social networking companies will be dressing up this summer to woo buyers. But Lepofsky questions whether it will be at rational prices. The Yammer deal, which values the company at 60 times its estimated annual revenue, already signals that these sorts of deals have headed into highly speculative territory, he says. Microsoft will need to extract a lot more money out of every Yammer user or add a boatload more for the deal to make sense, he says. "This is one of the first [acquisitions] where, monetary-wise, the equation didn’t pan out," Lepofsky says.
And probably not the last.
