Microsoft announced today that it has entered into an agreement with Yammer, a social network for the enterprise, to acquire the latter for $1.2 billion. Yammer will become part of Microsoft's Office Division, led by Division President Kurt DelBene, though the team will continue to report to Yammer's current CEO David Sacks.

Yammer allows businesses to create a private network for their employees, and offers free as well as paid pricing plans. If your company has a Yammer network, you need a valid company email address to sign up for Yammer.

Launched in 2008, the 4-year-old social network already has a 5-million-strong user base. Yammer says employees of a total of over 200,000 companies and 85% of the Fortune 500 companies use the social network.

Microsoft plans to integrate parts of Yammer's technology into its existing enterprise communication and collaboration products such as SharePoint, Skype, Office 365 and Dynamics (and possibly vice-versa.) At the same time, Microsoft has committed to continue to develop Yammer as a standalone and cross-platform service.

Here is an excerpt from Microsoft's press release:

"The acquisition of Yammer underscores our commitment to deliver technology that businesses need and people love," said Steve Ballmer, CEO, Microsoft. "Yammer adds a best-in-class enterprise social networking service to Microsoft's growing portfolio of complementary cloud services."

Update: The closing conditions were met and the deal was completed on 19^th July.

Image credit: Microsoft News Center (modified)