Microsoft to buy Yammer for $1.2 billion

Microsoft Corp (MSFT.O) 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 (FB.O) to corporate customers.
Talk of a deal had circulated earlier this month, but the two companies only confirmed an agreement on Monday.

Four-year-old Yammer, which has 5 million users of its private, in-company social networks, helps companies' internal communications and collaboration by allowing employees to form groups and interact with each other freely. Companies such as Ford Motor Co (F.N), Supervalu (SVU.N) and Deloitte are customers.

The 400-employee firm will keep its headquarters in San Francisco but will become part of Microsoft's Office unit under Kurt DelBene in Seattle. Yammer will still be led by current CEO David Sacks, a former PayPal executive.

The service should fill a growing gap that Microsoft was struggling to fill with its SharePoint application for creating private websites for intra-company projects.

"This acquisition will immediately make Microsoft a strong competitor in the enterprise social market," said Larry Cannell, an analyst at tech research firm Gartner. "It was a stretch to call the capabilities in SharePoint's MySite feature a social network site."

With Yammer, employees can use a private, online company directory to contact co-workers, form networks, chat, share links and post news. A basic version of Yammer is free, but a subscription buys more security and integration with other company-wide software. Yammer's subscription-based business model makes it different from ad-driven network companies like Facebook or LinkedIn Corp (LNKD.N).

The deal, which values Yammer's users at about $240 each, may ignite interest in companies offering similar services, such as Salesforce.com Inc (CRM.N), Jive Software Inc (JIVE.O) and Telligent.

The area of internal networking for companies has attracted other big tech companies such as Cisco Systems Inc (CSCO.O), which has a similar offering to Yammer called WebEx Social, and International Business Machine Corp (IBM.N) with a rival product called Connections.

Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive and attractive to its core corporate users and home consumers, and has even been experimenting with its own social network called So.cl (pronounced 'social').

Last year it paid $8.5 billion to buy online chat company Skype, which it is integrating into its offerings, including the next version of Office.

Microsoft's Office suite of applications - including Outlook email, Excel spreadsheets and PowerPoint presentation program - is the bedrock of most companies' day-to-day working software.

The Office unit is Microsoft's most profitable, contributing 60 percent of its profit last year, and amassing more sales than its flagship Windows operating system.

Microsoft gets the Indian developer community ready for Windows 8

umbai: Over 200 hundred developers from across India have camped up for two days at a hotel in south Mumbai for a Windows 8 hackathon. This is the first time that the Indian developer community is getting into the hack mode for Microsoft Windows.

Hackathon, or codefest, is an event in which computer programmers and others in the field of software development, like graphic designers, interface designers and project managers, collaborate intensively on software-related projects.

With Microsoft Corp geared to launch its cloud-connected Windows 8 later this year, the US-based software developer is making sure that the developer community is ready with applications (apps) for the platform.

“India is an incredible bastion of software developers. On a global scale about 25-30 per cent of all the software codes written in the world are written by Indian developers (based out in India and abroad). Certainly galvanising the developer community in India to see the possibility and re-imagine Windows 8 and build next generation businesses is important,” said Steve Ballmer, chief executive officer (CEO) of Microsoft, via a video conference at the Microsoft India Technology Summit.

Atul Gupta, an individual application developer who has been coding for the last 16-17 hours, is elated with his experience on Windows 8. “This is my first time that I have attended a hackathon and the experience was awesome. The application that I developed is consumer oriented,” said Gupta.

But some of the app developers, who are active on the Android and Apple platforms, are yet to test the Windows 8 platform. “We do not see any immediate reason to be part of the Windows 8 environment. What matters is the actual number of people using handset on that platform, as of now they are very small. Besides the Android base is just growing fast,” said Sagar Bedmutha, founder CEO of Optinno Mobitech.

The company has been developing apps for Research in Motion’s (RIM) BlackBerry smartphones and the Android platform.

Noida based OnGraph Technologies is yet another app developer that is staying away from the Windows 8 platform. “Our issue with Windows is that it is not an open source system. Hence, we prefer Android,” said Nikhil Verma, business development manager, OnGraph.

For Microsoft, getting the developer support from India and APAC (Asia Pacific region) will be significant as the region has several hundreds of companies creating application for the Android, Apple and RIM platforms. “For Microsoft, this is crucial as they need to create a market. There is no dispute that Windows has a huge base in the enterprise segment but that’s not the case in the handset and tablet segments. And these are two areas that are growing exponentially,” said an analyst who did not want to be identified.

Ballmer also reiterated that the launch of Windows 8 is a “rebirth” of the company. “While Windows 7 was one of the best products, with Windows 8 we are re-imagining Windows from ground up,” he said.

Agrees Alok Shende, principal analyst, Ascentius Consulting: “For Microsoft Windows 8 is one of the most important product. The company has a dominant position in the desktop environment, the challenge will be in the mobile category. With Blackberry losing sheen in the enterprise segment perhaps Microsoft can address that market too. But consumers already have too much to choose from,” added Shende.

Vishal Tripathi, principal research analyst, Gartner, believes that Windows 8 has its benefits as security, application store and delivery models and app contracts. It will also support broader devices where users can have same seamless experience on tablet, Phone and PC. “But one of the challenges for Windows 8 is the Metro UI. While they have developed plenty of desktop applications but the catalogue of Metro is limited. Though Microsoft is encouraging developers to build applications and apps acquired through the app store are free for a limited time. In India Windows 8 adoption will face some resistance enterprise who have recently migrated to Windows7 so moving to to a new platform is a huge cost in terms of license, manpower, application testing etc. The change in OS in the enterprise environment happens every three to four years in India and in case of small businesses perhaps up to five to years. It might make sense of companies who are still on XP to move to Windows 8,” said Tripathi.

Indian products will have edge using genuine IT, says Microsoft

The usage of genuine IT in the manufacturing sector will not only differentiate the Indian products but will also give it an edge over the products of their competitors, a Microsoft official has said.

"According to the new unfair competition laws in certain US states, sale of products which are being manufactured and distributed using illegal information technology, for example pirated software, is prohibited," said Tabrez Ahmad, director, IP policy of the software major.

"The law's objective is to create a level playing field for law abiding manufacturers by obligating the non-compliant manufacturers to show use of genuine and legal IT before their products can be distributed and sold in certain territories of US," he said at a function here Wednesday.

"If the Indian manufacturers - who are into exports in US - use genuine IT, then they can score over competitors who are using non-genuine IT because their products will be scrapped," said Ahmad.

Leading IP boutique law firms also feel that India can increase its exports to US and come to a level playing field with China, which tops the list.

"If Indian manufacturers start now by using genuine IT for manufacturing and distribution, then they can easily gain momentum in the competition in terms of exports to US as nearly 79 percent of the Chinese manufacturers use non-genuine IT," said Sunil K. Singh of Saikrishna & Associates.

"This is a big opportunity against China where software piracy and hardware counterfeiting is among the highest in the world. And since China is also the largest exporter of manufactured products to US, they will face maximum challenges. Even an increase in two percent of export to US can have a very positive impact on our economy," he said.

Silver Lake, Microsoft working on new Yahoo stake offer

A consortium of private equity group Silver Lake, software giant Microsoft Corp and venture capital firm Andreessen Horowitz are reworking their bid for a minority stake in Internet company Yahoo Inc, a source familiar with the matter said on Friday.

Silver Lake's consortium is working on a new offer for a stake of 10 to 15 percent in Yahoo after the company asked for improved terms, the source said.

The new offer would be predicated on Yahoo finding a new, world-class chief executive that the consortium would support, the source added. Yahoo's board fired CEO Carol Bartz in September and has yet to hire a permanent replacement.

The Wall Street Journal reported earlier on Friday, citing people familiar with the matter, that private equity firms seeking to acquire just under 20 percent of Yahoo were working on new offers for a smaller stake at a higher per-share valuation.

TPG Capital, which sources previously told Reuters had also bid for a minority stake, did not respond to a request for comment. Representatives of Silver Lakeand Microsoft declined to comment while an Andreessen Horowitz spokeswoman could not immediately be reached for comment.

"As previously announced, the board is evaluating various alternatives as part of its comprehensive strategic review process, all of which are designed to enhance shareholder value and promote growth and innovation at Yahoo," a Yahoo spokesman said.

"The board's process is open to all alternatives and has not restricted the range of various options or proposals in any way," he added.

The first offer by Silver Lake's consortium valued Yahoo at $16.6 per share, about $1 per share less than what TPG proposed, people familiar the matter had previously told Reuters. Yahoo shares closed down 1.3 percent at $14.96 on Friday.

Yahoo has several available options. Chinese e-commerce giant Alibaba, in which Yahoo has a 40 percent stake, is preparing a $4 billion bank loan to buy back that stake, Thomson Reuters publication Basis Point reported on Thursday, citing sources.

Microsoft: India no longer a preferred destination for MNCs

Global software major Microsoft said that for MNCs, India is no longer a preferred destination.
"It doesn't make sense any more. For MNCs India is no longer a preferred destination. We have lots of issues concerning our operation here," Microsoft India chairman Bhaskar Pramanik said when asked if the company is considering any R&D centre for West Bengal as it seeks to work closely with the state government.

He was speaking to reporters on the sidelines of Infocom 2011 conference.

Pramanik later clarified that he was speaking about technology and IT companies. "I think a lot of that need to be resolved. We have to be cautious about any new investment in the state," he said.

Asked what the issues were, he declined to list the challenges or issues the technology MNCs were facing. "I think you had better talk to Nasscom. It is the voice of the industry," he said.

Nasscom regional (east) head Suparno Moitra declined to comment.

Asked to throw more light on 'preferred destination', Pramanik said, "I think we look at everywhere in the world. I think choices are many," he said.

Meanwhile, reacting to the Centre's decision to suspend FDI in multi-brand retail till a consensus is evolved, Pramanik said he felt disappointed with the government's decision.

"FDI in all form is good, be it in retail or aviation," he said. "We have a strong corporate sector, central and state governments. Checks and controls could be put in place to ensure net gain for the country in terms of employment, growth and earning rather than being negative," he said.